It's a different time. Giving boys a pocket knife was a practical gift. Definitely not butterfly knives as they aren't practical in the way pocket knives are. Pocket knives are handy for outdoor activities. However, with schools being intolerant these days, it's not a good idea to give kids pocket knives anymore. They will inevitably take it to school and cause a meltdown.
I know a guy in his 30s who loves knives. He orders expensive ones online. He's also a machinist and makes his own knives. It stands to reason that some people have a fascination with knives, evidently.
I think perhaps a more practical approach would be teaching the kid that there is a place and time for everything. He has to consider his audience. Knives, even simulated ones, are not compatible with school policy. And, he should know that it is your responsibility to enforce school policy. Therefore, he needs to express his interest in knives at another location where the rules do not prohibit.
RE: Should I be worried?