Them? I tell them "Cool, nice knife!" and we chat. 1) I mean it, and 2) it's common courtesy. Why would anybody do anything different? Why act like an ass to them?
What I need advice for is how to deal with people who say they "train" with blades. Typically I just eyeroll at that point. No doubt there is some better way.
Ask them what blades they train with!
I've got a pretty cool LARP tanto made completely out of pretty strong foam (think glorified nerf) with no spine in it so it bends so you can train safely with it anyway. Don't need armour for this (but eye protection definitely). You can honestly just use a rolled up piece of foam, too.
Traditional plain bokuto/boken are really nice to have, too but you can't spar with them, really.