Knife is an easily overlooked card that is outshone by other weapons. Some people quickly jump on the conclusion that it's simply trash, however it definitely has its uses, at least for now with the current card pool early in the Dunwich cycle. The card's two main positive aspects besides that it's neutral and useable by every investigator in the game are that it's incredibly cheap and can be used for a single +2 combat +1 damage attack which is an even better fight action than a Machete swing.
I think there's mainly two situations where Knife becomes useful. Knife is useable as a filler weapon in a deck where you want to draw a weapon as fast as possible, like a set of 2 .45, 2 Machete, 2 Knife. Once you draw one of the actual weapons, you just throw the knife at someone for some nice damage. Of course for that case it will become less important once the classes have more weapons to choose from, but until then it's a nice backup. Alternatively you use it with an investigator who HOPEFULLY never has to actually fight, but might still need to defend herself one or two times like Daisy Walker.
Instead of comparing Knife just to other weapons, I think it's better to also compare it to more supportive cards like Overpower and the recently previewed Prepare for the Worst. They all have positive and negative sides, so it comes down to personal preference or the composition of the deck to determine which might be better. For Guardians, Prepare can act almost like your 2nd/3rd/4th copy of an actually strong weapon, but it could also just fail and waste an action. Kukri is way more action hungry and doesn't give bonus damage (it's useful to know that, unlike Kukri, Knife can potentially kill a 4hp monster in one turn), but is more reliable. Overpower is the cheapest on actions and can draw a card, but doesn't give any bonus damage. Knife is a nice middle ground, gives a good combat and damage boost, but requires an action to play and a hand slot. And even if you don't have time to actually play it down, you can chuck it on a test as a mediocre Overpower. Oh and of course you can use Scavenging to recur the knife, for what it's worth.