Ok I have read the Night Scene and it is a shame that Captain Falcon is gone! I love C. Falcon as he's one of my mains in Project M! Moving on, I do believe that it was in a Communter's room that the killer was trying to attack. Speaking of the killer, I do believe that this is Wario no doubt as he is the only character to have such a comical laugh as "Bwa-ha-ha" or "Wha-ha-ha". Not to mention, Wario usually laughs before he knows what's really going on as seen during the Subspace Emissary. As of now, we have three members who can potentially kill: We have Link as the Vig, Wario as part of the mafia, and then we have the second killer with knife. This character however seems more likely as the SK no doubt, the only problem is who this could be. I personally believe it could either Shiek or Snake. Look at what the killer was using as a weapon:
Snake and Shiek both fall under the category of using stealth, whether as shown in their respective movesets or from the games they come from. Shiek does have the Needle Storm move as the Standard Special move. I'm not so sure if Jamie or anyone here is familiar with Project M, but it's basically a mod for Brawl to have the aesthetics of Brawl with the physics of Melee (i.e. Wavedashing, one air dodge until contact has been made again, easier to combo, etc.) In Project M, Snake has gained a blade knife as his Forward Smash. Villager is the third and final option that I think would make sense as this second killer mainly because for him being infamous for his many memes of him holding his axe, which in turn could somewhat could be seen as a bigger knife. Of course, this is just speculation and any character could have been given a knife, but I'm going to assume that this game is going to be accurate on all of the characters and their roles and their weapons will be based on what they use in the Smash Bros. series.