If the guy drops the knife, and walks or runs the other way, immediate lethal threat to you is removed. You yourself then (in all states but 1) have the DUTY TO RETREAT. (If in a public place) That means, as he is running/walking one way, you should be going another. Of course calling LEO's, giving description, ect. But get the heck out of there. If you stand there and wait for him to get another weapon and come back again....I can see a jury looking at that as if you were spoiling for a fight, or a little justice....revenge....whatever...