Well that was resolved quickly
Honestly? I prefer it that way. Knife Guy's whole stick was confidence put in his weapon's psychological effect on people who are scared of it; he didn't have any particularly great skill in using it. The very moment he faced any opponent who was willing to risk stabbing him to defeat him, he would likely lose, whatever it was, MC or some other psycho who takes part in this no rules tournament.
It's Ironic, but in the end, Knife Guy never really had the guts to stab a person. He was too hesitant to be passive after causing a minor injury and believed he already had the upper hand and won. A really experienced knife fighter would win already by taking the initiative.