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Yeah, both guys starting from their knees is pretty dumb, I think. One person has to take the bottom position. I always just take the opposite of whatever my partner chooses. If he wants to start on his knees, I'll sit down. If he wants to sit down, I'll go to my knees or standing, I like standing passes a lot.
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On that, then yes, knee wrestling "is not a thing," although from my experience in two schools (Relson and American Top Team) my instructors have always reminded us that "knee wrestling is not a thing." In other words, knee wrestling is really a beginner's thing in my experience with jiu-jitsu schools I've trained in and visited. Otherwise, someone settles as the guard player. I may be wrong, but most BJJers understand this. To an outsider, it may look like we are knee wrestling but we are already doing what Barnett suggests.