Chuck does not cut butter with a knife, he cuts a knife with butter.
Chuck Norris and Butter
Explanation
This is a classic Chuck Norris 'fact' that plays on his image as an incredibly tough and powerful person. The humor comes from the absurdity of suggesting that he could cut a knife with something as soft as butter, which is not possible, highlighting his supposed superhuman abilities.
Yeyeyeeyeyeyeyeyeyeye
Awesome