Spitballing some possibilities here based on the info you've given:
1) You might have not actually crafted a knife. The knapped blade is useless on its own, so you need to attach the knife blade to a stick or bone in order for it to actually function as a knife.
2) If you're playing on a multiplayer server and the lag is really high, it can take several real-life seconds between breaking a block and the block/material actually dropping. In this instance, wait around a little bit to see if there's a drop. It might be better to just switch servers or stick to single player and see if that changes anything.
3) Could be some kind of hyper-specific bug, though I've never seen or heard of a bug like that. Try starting a new world in this instance.
Can't think of anything else. Hope this helps!
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HappyHole's post in How do I get grass? was marked as the answer