I think though that regardless of what attack is being done and the Aikido respones offered, total awareness of the attacker's entire body and the surrounding environment is very important to make sure that things may work in a martial sense. Even if it is unknown whether there is a weapon in the other hand or not, one should be always aware of where each part of the attacker's body is during any part of a technique. Basic spatial awareness in my book. This same concept is applied when Uke lands on his back after the kotegaeshi ukemi and may be able to kick you in the head (from the ground) as you try to pin or turn him over - I train my students to let them kick and apply yonko on their ankle, then turn em over. I guess it's the goal of the training that would decide what one does.
This "grab into a follow up knife attack" argument is very interesting, since this very thing is an integral part of the Shodokan's Kyu grade syllabus as a tool for understanding timing, kuzushi, awareness and hand placing/grasping techinques. Not sure where the idea came from, may be a historical thing. But the fact is that kuzushi and technique from 4 different variations of this grab and knife attack make up part of the grading requirement for every test from 5th Kyu to 2nd Kyu, one of which is kotegaeshi from a gedan level kuzushi.