I remember playing several different kinds of games with our pocket knives, Mumblety-peg was one of them.
Another one was to let your knife fall off several different parts of your body starting with your hand, then wrist, then elbow , shoulder, chin, nose, etc.. and the knife had to stick in the ground leaving the handle clear of the dirt or grass. Kind of a game of h.o.r.s.e. with your knife if you will. The same honor of retrieving a peg, usually from under the soil, was awarded to the loser.
I liked to use my Scout knife, or this big ugly brown Barlow I had because I thought the weight of the handle would help drive the blade home. Especially in that last game I described where gravity alone would be all that drove your knife in the ground that weight would come in handy. And you could really bury the peg with a scout pattern knife.
My dad taught me those games (and more) and we never once thought about the "damage" to our knives that would result from those games.
Granted, today I would not subject most of my knives to that kind of "use". But then again I just spent $250 for a single Case knife a few weeks ago, and I don't think you could have held $250 worth of Imperial Barlows in a 5 gallon bucket in 1976

(slight exaggeration but you get the point).
So save your nice knives for admiring, but by all means get a few "beaters" and teach a kid how to play. If it's not your own child you might want to modify the game so you don't have him/her throwing a knife at their own feet. That may not go over too well with some parents (can't imagine why

).
That should be a memory worth at least $20-$30 (about what a movie for 2 with popcorn and drinks would run you) and you can get a nice pair of Rough Riders or the like for that if you shop around.