Some folks here carry real knives but ONLY for utility such as felling small trees to provide cover and concealment, etc. They are never pulled out during gameplay. A few of us have rubber knives and use them for mercy kills occasionally.
I've used my baton indoors as a mercy weapon but made sure to deploy it BEFORE coming across anyone, and used it just as an extension of my arm to tap people as I came up to them. A lot of them thought it was a pretty cool idea.