I think it's no longer processing damage because it has negative health. Remember, when you cactor it doesn't do anything but change the picnum of the actor -- if the actor has negative health it will continue to have negative health unless you set it again.
Try using "strength 1" in all cases, not just when the weapon is KNEE.
EDIT To follow up on that, here is part of the source code for the IncurDamage function:
if (pActor->extra < 0 || pSprite->extra < 0 || pActor->picnum < 0)
{
pActor->extra = -1;
return -1;
}
pActor->extra is the damage to be processed, and pSprite->extra is the health of the actor. So what that code says is, if the actor has negative damage,
or negative health, or a negative picnum, then negate the damage and abort the function.