The sensitivity of momentum distributions, recoil polarization observables, and response functions for nucleon knockout by polarized electron scattering to channel coupling in final-state interactions is investigated using a model in which both the distorting and the coupling potentials are constructed by folding density-dependent nucleon-nucleon effective interactions with nuclear transition densities. Elastic reorientation, inelastic scattering, and charge exchange are included for all possible couplings within the model space. Calculations for 16 O are presented for 200 and 433 MeV ejectile energies, corresponding to proposed experiments at MAMI and TJNAF, and for 12 C at 70 and 270 MeV, corresponding to experiments at NIKHEF and MIT-Bates. The relative importance of charge exchange decreases as the ejectile energy increases, but remains significant for 200 MeV. Both proton and neutron knockout cross sections for large recoil momenta, p m > 300 MeV/c, are substantially affected by inelastic couplings even at 433 MeV. Significant effects on the cross section for neutron knockout are also predicted at smaller recoil momenta, especially for low energies. Many of the response functions and polarization observables for nucleon knockout are quite sensitive to the coupling scheme, especially those which vanish in the absence of final-state interactions. Polarization transfer for proton knockout is insensitive to channel coupling, even for fairly low ejectile energies, but polarization transfer for neutron knockout retains nonnegligible sensitivity to channel coupling for energies up to about 200 MeV. The present results suggest that possible medium modifications of neutron and proton electromagnetic form factors for Q 2 > ∼ 0.5 (GeV/c) 2 can be studied using recoil polarization with relatively little uncertainty due to final-state interactions.