Hey thanks for playing! The knife actually exists, though maybe a bit too obscure to find. If you go back to where the first guy you met, there will be a pool of blood. Inspect it a few times and you'll get the knife. I think the gacha system should have been tied to the monster drops somehow, because as you said its makes it less interesting to explore than the second game.
This was my first attempt at a longer game and it made me realize that longer games might not be really suited for game jams. I think jam games are better when they are short, polished experiences that showcase interesting mechanics. It's just easier for both the dev and players. This game was definitely too "bulky" to polish, and the gacha mechanic could use some more iterations to be more engaging. It's why my next entries are shorter games.
Even though you didn't finish it I'm still glad you gave it a try. Thanks again for reviewing the trilogy, hopefully it was a fun experience overall. If you decide to finish it, let me know how you liked it.