Using a knife on a Grass block creates grass in the grass block. Because of that, the grass is ejected out way too far (4 or 5 blocks away it seems, as it escaped from suffocation).
Wouldn't it be better to make it appear above the grass block ?

(Forge and Project Rankine always to last update before playing)

Thank you for your suggestion. This will be fixed in the Version 1.2 update.