The taser is not a magic solution and isn't always usable or a good option depending on circumstances.
When dealing with a person with a knife if there is time and distance that allows it can be an option if the person behavior is such that it can be used. If the person is staying more or less stationary and not moving around and most importantly not actively attacking somebody then you can use it, maybe.
If the person is coming toward you or another person with the knife then it's not a valid option. Because it's hard to get a shot at a moving person that gets both barbs of the taser in and working on a person moving and failure in that circumstance, versus someone stationary with a knife, means that someone gets stabbed.
A persons mental stability really doesn't come into play in decisions to use a taser or not. Since it appears this was dispatched as a burglary report call there would have no reason for officers to expect an encounter with a person with mental illness as the complainant nor any reason for them to come in expecting to be assaulted with a knife by the same, they rolled in expecting to just be making a report. Shows how quickly these things turn sometimes.
I fully expect there will be a lot of irresponsible jumping to conclusions and accusations against the officers before most of the facts are out. On the ground there and here online. And I fully expect if the facts show the officers did act properly none of those same people will retract or admit they were wrong.