What if you did it like in PyroLand, how the pyro makes a rainbow, then burns it, but with spy things and a cookie...

He should bite the cookie, then stab outward. It should also be one of those on equip vist pyro land and only visible in pyroland

Spy eats the handle/hilt (eating the blade may not be a great life choice) of the Cookie Cutter, then pulls out another one [another full Cookie Cutter] from a plastic bag.

Or, maybe he could eat the knife like a sword swallower would swallow a sword. Except this is a knife made of gingerbread, and it is therefore actually eaten.

Press G for regular taunt and hold G to eat and regain health

I love that idea

Bite the side of the end off so that it is sharper then he stabs foward

how to i get this

Waves the knife in the face of his foe, the foe gets tempted by the smell of the cookie and then the spy stabs the poor schulp in the face. (Facestab!)

Bites it, throws it to the ground to his right (any enemy in it's way will suffer 225 damage), and pulls out a new one, recovering 50 health.
Cool thing you could do is you could stab on a ledge with this knife and taunt tossing the knife downward killing anyone far below him.

heres a weird one: when spy pulls out the cutter the knive disguises as a normal knive does the normal taunt then the cookie disguises back into the cutter

Pulls arm from left side and sweeping it towards his nose.
Deep wiff of the Gingerbread knife while left
"Delicious!"
Spin knife and stab enemy: Short range

The spy pulls out the knife and swings it from left to the right slowly and then bites off the top and says: Delicious! Another taunt shows up on the taunt screen to eat it or to do the other taunt wich is a taunt kill

maybe he throw's the knife, like a throwing dagger, and pulls out a cookie tin and grabs another, then puts the cookie tin back away

He takes a bite of a cookie and then trows it

He should take a bite out of it , drop it , then pull out another , and should heal him 9 health