
I think I really like this knife, surprisingly. It's certainly no Machete, but it does allow one more attack in a round than the Machete, and that attack has unconditional +2 and +1 damage, which is slightly better. I suppose your best case is to dual-wield, chopper in one hand and knife in the other, only using the Knife for its ability when available. Might actually make the Bandolier more attractive, since you can activate two Knives and hold a machete, or even get an extra free attack even with a Lightning Gun equipped. Knife + Bandolier + Zapper gets you 11 damage in a single round with 3 actions and no other cards; kinda crazy (and assuming everything hits).
As for the obvious drawback, soaking an attack, it turns out that an enemy attack always deals you damage, even if you assign that damage to your assets. Put another way, an effect that deals your investigator damage is always considered to have dealt you damage, even if you assign that damage to something other than your investigator. At least, if I'm understanding "Dealing Damage/Horror" on p. 7 of the Rules Reference correctly. What this means is, if you have your trusty Pooch out and, during the enemy phase, a Swift Byakhee attacks you, you can assign the damage to your excellent dog, triggering his effect, and trigger your Knife, taking no damage yourself and killing a 3-Health baddie without using an action. Furthermore, damage mitigation for Guardians is already pretty massive, so even without damage-soaking assets out the ability is pretty worthwhile. Weirdly, it doesn't work against enemies that only apply Horror, which isn't great, but those enemies are pretty rare anyway.
The more I look at it, the more I like it; I'll have to try it next time I make a Guardian. Probably best with Mark, as it synergizes with his love of taking damage, or with any asset-heavy fighter, like Leo Anderson.