plot the scene was edited so that Wilson  never appeared in it. However, after a test screening with the knife fight,  the viewer reaction to the edited scene was mainly confusion so the fight was  ultimately cut out. If you look closely, when Paladin gives Blair his Pilgrim  Cross Blair has a bandage on his hand. This was because Gerald wounded him in  the knife fight. Blair used his Pilgrim Cross knife to kill Admiral Wilson  and basically end the fight, proving to Gerald his loyalty to the  Confederation.