My fiance’s (34F) son (4M) pulled the knife on her; should I consider backing out of this relationship?

I (35M) met a single mom (34F) with a child (4M) a year ago. After getting to know her through online, phone, and multiple in-person interactions, I proposed to her and we were going to get married. I introduced her to my parents (65F, 60M) and my daughter (5F) whom I brought with me. We were all having dinner but I did notice that her son did things that made me concerned.

While eating out, he refused to stay in his seat. He was constantly screaming when she asked him to behave. He grabbed his chair and pushed it around. He aimlessly walked around the outdoor patio. Everyone kept looking at us. I've seen kids misbehave but he really misbehaved.

He also kept walking around and stepped on ants for some reason. My daughter got upset, asking him to stop unnecessarily killing ants that were just doing their own thing but he ignored her. I value being good to animals, even insects, and I felt pretty disappointed seeing him act like that and I asked him to not do that. My daughter got confused about what was right or wrong and I told her that he was wrong and I wasn't shy about stating that. My fiance told me that when they see ants at their house, they always get rid of them by stepping on them, even if the ants are outside. I would get it if it were in the house but to mercilessly kill wherever they are is concerning.

After that, when the food came in, we were all eating and he got upset saying he wanted what we had. I offered to trade food with him because sharing is fun. He refused and just got upset. My fiance tried to explain to him about sharing food and when he refused to look at her, she tried to hold his hand. Then he did the unimaginable. He grabbed a table knife and aimed it at her. He threatened her while holding the knife close to her. I was shocked. My parents were shocked. My daughter was shocked. I told him to put it down that it was never acceptable to do such things. To speak up is fine but to put a knife against someone, especially parents, is completely wrong. He eventually let it go and walked away.

This, as well as other behavior issues I saw, changed the way I saw her. While he can be a good boy, he can also be downright difficult, and it made me question what she had been doing as a mother. She kept defending his actions saying things like, “He was just grabbing the nearest object he could find” and “He would never hurt me”. That still doesn't make it acceptable.

I later found out from her friends and colleagues that she typically enables him by being his friend rather than parent. He's delayed in his potty training and language acquisition. He's coddled all the time by being given what he wants. When he shouts in the store, she buys him something to keep him calm (often). She gives him chocolate milk every single day (tons of sugar). So many red flags that I felt were insurmountable. I initally saw her as a potentially great mother to my daughter but now I don't feel like she would be, after learning all of these things.

I feel like an asshole but I think I want to back out of this relationship. My gut feelings tell me something is off. I value how a child is raised. And I feel kind of threatened when I see how she parents and how she defends him. I wish I knew about this from the start but they say you only know what it's like when you start living with them. Should I consider backing out?