When Utility Knife enters the battlefield, attach it to target creature you control.
Equipped creature gets +1/+1.
Equip {3} ({3}: Attach to target creature you control. Equip only as a sorcery.)
Attaching an Equipment with its enters-the-battlefield triggered ability isn’t the same as using its equip ability. You don’t pay mana for the attachment, and if the Equipment enters at a time you couldn’t cast a sorcery, you can still attach it to a creature you control.
If the target creature becomes an illegal target, the Equipment remains on the battlefield unattached.