Mudiay would be an interesting flier as part of a larger trade ( i.e. he is not the main piece, but a smaller complementary piece. ) But I doubt a larger trade is possible between the current two franchise rosters.
No stone should be left unturned, but the Nuggets would likely get the same trade return waiting to deal him as they would if they dealt him right now. So to them, it's worth it to have him as depth, and see if he can't develop a little more.
Sometimes a player does just need a change of scenery, but the Knicks should honestly concentrate on guys with strong fundamentals first and foremost. High level tools that you hope might translate would be useful for a team in a different situation than the Knicks. A team like the Warriors can bet on tools a little more on a flier type player, but the Knicks just need guys who can play actual team ball.