AFAIK the main reason is weight. The standard vests are a fabric, like a shirt (sorry for the over simplification). As mentioned in the other response these fabrics slow a bullet down to zero. It can still break your ribs, so. On the other hand, a knife cuts through these fabrics as it will cut through a shirt. A solution is to put "plates" in the vests at critical points, they also offer additional ballistic protection.

Downside is these plates aren't flexible (conformt is an issue if have to wear your vest all day at 30° C in summer) and they become heavier and more bulky.

But again, that's what if been told by some german cops and I'm no expert in that.

I recall this being something to do with the physics involved. Modern ballistic vests don't stop or reflect bullets like a stereotypical Iron Man armour, they're special fabric designed specifically to absorb the energy from fast-moving small things and slow them down to zero. A thrust knife moves a lot slower than a bullet and has a different shape (wider, flatter, etc) so apparently it can go through standard vests without much trouble. It's difficult to create practical vests that can stop both.