: Thus, in the unlikely event that you have a Phantasm and a Headless
: ganging up on you at extremely close range, you can't stab the Headless
: through the Phantasm.
I just thought of another, much more likely, scenario where the "only nearest critter" aspect of the knife attack might come into play.
If you're in a knife fight with several critters, and give the nearest one a fatal stab, you can't immediately follow up with a stab at the critter behind it. A dying critter is normally considered un-hittable, and bullets just go through it to whatever is behind, but not with the knife. The one in front continues to act as a shield until it's completely dead. This will count as a miss, messing up your accuracy stats.