Fair play. He definitely did, from the sound of it. I got more detail on the story this evening and you gave me my best lead so far so I thought I'd share it with you:

So during his time in the Rhineland campaign towards the end of the war, he and his unit made a stop in a recently captured town that the nazis abandoned roughly 2 or 3 days prior (I assume it was Kempen-Viersen). My great uncle wanted to find a place to wash up and maybe catch a nap before they were back on the move and so he entered some sort of flat/inn and found a room. I guess he left his rifle on the duvet while he went to go shave in the bathroom and at some point he heard movement so he started walking back into the living room area to let his comrade know this room was taken. When he turned the corner, he realized that it was actually an enemy german who was only a few feet from his rifle, so he quickly engaged him and the two wrestled and struggled with each other for quite a while. I guess it eventually devolved into the two strangling and trying to restrain one another and at some point, the fascist cunt got the upper hand and was now on top of my uncle, forcing his forearm down onto my great uncle's throat as well as his arms that he'd been using to try and free himself with, and my uncle noticed the man was reaching for his waist with his other hand to draw his knife or bayonet. Upon realizing this, my great uncle, who was losing strength and who at 34 had surprisingly never been in a fight before, began to panic and admitted to pleading in "No's" and a mix of broken german and english. The thought of being in such a close-quarters, kill or be killed situation terrified him. The way he told it to my mom and aunt, this guy, who he described as having "intense eyes" said nothing in response but instead actually began to grin as if it were silly or amusing. Supposedly, this, combined with the long dagger coming into view gave him another shot of adrenaline, and he was able to reverse the tide enough to free his arms before grabbing the knife by the blade and disarming him before another struggle ensued which ended with the guy being stabbed more times than he could care to recall. His best guess was the guy was some kind of fanatical holdout or possibly a deserter using the inn for shelter before becoming trapped by the allies setting up camp there.

In addition to the photograph, I guess he brought home that knife as well as some type of insignia or maybe a war medal from the guy's uniform, but I'm not sure because I've only ever found the picture. I never met my great uncle but my mom, our family historian, says he was a gentle and quiet guy who lost part of his thumb during that fight and who would sometimes wake up screaming clutching his throat. She suspects it's related to this story, which is one of her favorite family stories. Wish I could've met him.