Played this with my wife and it's a lot of fun. Both the punchy action and doing it on the same controller. I guess technically the same controller thing is a bit of a gimmick, but it just makes this feel like thumb fighting, which really adds something to the experience if not to the game.
My only criticism is that it's possible to instantly win if you face away from the other player while grabbing the knife. I think that could be easily fixed by always enforcing a minimum distance between the players equal to the knife length, even if no one's holding the knife.
I also see the lack of multiplayer game testers has hit you guys even harder than us (we also went for local multiplayer). Sorry to see this has only three ratings, it's a really cool game!