His military service and where he served are of no matter. The weapon in question speaks for itself. What you have is a knife made from a cadet's sword—no doubt for use in trench warfare. I almost thought it was a Royal Company of Archers sword at first, but then thought better of it. They typically have what is called a "yataghan" style blade which is recurved but I have seen them with gladius blades.
Sold through the famous Bannerman Arms in New York, NY, this particular sword may be associated with Freemasonry and the Yorkist Rite temple but are of old French surplus stock. It dates between the late 1880s to 1920s. As you can see, a lot of material was removed. It may be of some value to a collector of things associated with trench warfare if it had some provenance but, otherwise, a sword worth circa $250 has been destroyed.