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When you are at the last level of the Arms Race mode, are you on an advantage or disadvantage with other players with a normal knife?

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No - the golden knife has the more specific purpose of ending the Arms Race - the knife is gold to convey to the user the difference between killing someone with a knife to steal their level and killing someone with a knife to win the game.

It provides you with no advantage or disadvantage other than winning the game if you kill with it.

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Source from CS:GO beta patch notes. – kalina Aug 28 '12 at 8:25
Quick question, what do you mean "steal their level"? DO you mean automatically be at that player's weapon level? Or is it just taking it away? – r3tr0 t3h PeNgU1N oF d00m Jun 2 '13 at 6:17
@lumbricuslubricant According to this wiki‌​, killing someone with a non-golden knife will cause them to lose a level (while you, as usual, gain one for your kill). Interesting; I hadn't noticed that either. – Jeremy Banks Jul 13 '14 at 12:09

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