Punchy heard her coming - he's much more aware than his demeanor gives off - and as such he only hops down from the rail, rather than startling off it. He turns to face her, smiling innocuously but keeping his guard up, at least a little.

"Hey, what's a fine shawty like you doing in a joint like this?" He sees the knife, but as she isn't charging towards him to use it, doesn't really focus on it.