I completely ignore knives in all my time playing, but I've recently read about it's huge sneak bonus.
I tried it out on a few mobs and it's definitely not terrible. Black metal knife is a good thing to carry while exploring the map in biomes you out leveled already.

I saw that it should do about 500 damage from a sneak jump attack, which I think would be great to kickstart fights against lox to conserve arrows, however the middle-mouse attack never lands on lox. I always just jump in front of them and stab the ground, then get hit right back. I've snuck up to them so close at times, i was able to get sneak bonus on a regular attack even, so it's not that. The attack just won't hit correctly.

Am I doing it wrong or is there some quirk with the hitboxes?