Calling it now: The "red dragon" looks way too similar aesthetically to the black knight, to the point where I think the dragon is the previous knight. It would explain why the previous knight's death in the battle is treated as hearsay, rather than fact, because everyone knows the knight disappeared, but not where to (he turned into a dragon). I think the armor's weird curse stake things in the shoulders (which we've already seen afflicting the current knight) have some sort of gradual demonization/monsterization effect, and it's basically the job of a knight to serve until they go berserk, at which point the next knight kills them and takes over.