Yo Sunog,
I think that if you saved yourself ridicule and possibly some legal issues (I'm unfamiliar with California law), you did the RIGHT thing. You also do the right thing by carrying a knife. There's no reason to put yourself in a bad position, socially, legally, or otherwise if there's no dire need. I always have a few blades on me, except when I have to fly, and most people don't even know. I see knives as tools first, weapons second. And like any tool, you should know when to 'whip it out' and when not to do so.
I give you BIG props for having the presence of mind to know that it wasn't the time to show them all your tool.