I don't know the quote either, but it sounds a iffy. The one thing it doesn't mention that if your knife is taken from you, it can be used against you. That just won't happen with your hand.
I think it is correct that for a martial artist, dropping the knife is a serious consideration, not so that he can use his hands, but because now there is an available weapon floating around that can be used against the artist.
On the flip side, most hand tactics will not open a nice blood flow and if they can, chances are the task is better done with a knife.