Thats for the gamemode Gun Game....when you get knifed you loose a level meaning you go back to the previous weapon you were using. The knifer gains armor.
Yeah, Proxie's right for the most part. Also, if you ARE the knifer, you gain a level. In addition, I'm absolutely sure you gain armor by slapping someone, NOT knifing. You only gain a level when knifing. If you slap someone you gain +1 lvl with armor.