Scott Benson's Knife Easter Egg.

During the knife fight with Gregg it's possible to break his knife, in which case Gregg pulls out a more crappy, orange knife.

Get Gregg's "Wounds" in the Woods.

Be sure to save before or after the Bike ride to the woods with Gregg. You'll need to revert your save if you mess up.

During Greggs hangout "wounds" in the woods, one of the first playful activites you engage in is a knife fight. Gregg first states that he "has knives", but he doesn't state how many. He then pulls out two knives at first and gives one to you. After the fight, Mae (you as the player), question why he was "caring two knives", in which he replies "Huh. Good question." After which you proceed with the hangout by breaking a log, shooting a crossbow and bird watching accompanied with deep dialogue.

Breaking Gregg's Knife. (Harder than it looks)

This is the hardest, but final part of getting the easter egg.

Simply (I say simply, but it's much harder than it looks) break Gregg's knife by clanking your knife against his as both of you attack. You'll know you've done a successful clank on the knife as soon as you hear a *ting* sound followed by a spark of white light between the knives. Do this three times in a row at any point during the fight (before or after hitting or being hit any amount of times). You'll know you've succeeded once the third *ting* is significantly louder than the others and about half of Gregg's blade has simply vanished (no animation of the blade flying off, it vanishes behind the spark of white light). Clanking three times in a row can be really hard depending upon how lucky you are with Gregg's reactions.

After Gregg's knife breaks both of your hands go back to the default positions (same as when one of you "wusses out"). Gregg says "oh damn", Mae tries to apologize, but is cut off by Gregg explaining he has an "old and shabby... but cooler knife". He pulls out what seems to be a beaten up orange dagger which matches the tone of his skin/fur and has a black handle that has a resemblence
to his jacket. He then says that "Orange is a cooler color anyways." Not only referring to the knife, but also possibly referring to himself as he is an orange fox. The knife fight then continues as normal until someone wins. If the player beats Gregg then they are awarded the "Knife Fight" achievement.

Extra Stuff

Originally I thought the color of the knife had something to do with Gregg, but after I followed more profiles about Nitw on media outlets I found Scott Benson's account which had this following pic as his profile pic.

The knife fight easter egg is most likely a reference to Scott Benson's knife within the pic.

You can find his profile here:
https://twitter.com/bombsfall?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor

I also realized after starting this guide that getting the easter egg isn't required to get the achievement or the diary entry, so that makes things a bit easier for completionists.

Thanks for reading my guide, and happy egg hunting. *tips hat.

Weird Autumn Update!

The knife is also a reference to the witch's Weather Vane used in the Night in the Woods supplemental "Lost Constellation" where you play as Adina.

[N7 Kobold]

Had no clue this existed. Pretty swag.

[Lemon_Jester]

I agree, orange is a cooler color anyways.

[ԾՐɿԾՌ]

Nice knife.

[Master Isaac]

Gregg rulz ok.

[Animals Aren't Real]

dang you got me, and my friend @Adobe Photoshop

[archanyhm]

@Adobe Premiere

It's been almost four years, but is this really true? I haven't found any sprites matching that screenshot, haven't been able to find any kind of references to the dialogue shown in the screenshot and I haven't found any code that actually counts the amounts of "clinks" occurring.

Nice try.

[Animals Aren't Real]

Watch yo profanity boyos

[mape]

@køt go read since your ass wanna be ignorant https://www.reddit.com/r/NightInTheWoods/comments/cy5lx9/news_regarding_alec_holowka_future_discussion/

[Nila Foxy]

>.> Getting Gregg to bring out the orange one is going to be hard

[Alfadorfox]

It's a Witchdagger!