It's treated like an honor, as if he's passed into manhood. Aslan takes Peter's sword and knights him, and when it's done, he tries to figure out if he feels different now, more adult. As he rises, Lucy comes to fling her arms around him, but when he steps towards Susan (Are you alright-?), she steps back, eyes locked on his sword and the mound of meat and fur still lying in the grass behind him.
Looking at her, he doesn't feel more adult. He feels like he wants to vomit.
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Looking at her, he doesn't feel more adult. He feels like he wants to vomit.