My reading: The daggers either get shunted or remain in the ethereal plane
Imagine the player ends their ethereal jaunt inside a solid object and gets shunted out of it. Would their clothing and belongings get left behind, causing them to return naked and unarmed, with all their stuff stuck inside a rock? I very much doubt that's the intent of the spell. Instead, their clothing and belongings should probably get shunted along with them, and that includes the daggers that they're holding. If you accept this, then the daggers must also get shunted out of any creature's space along with the character and the rest of their belongings. Alternatively, if they character lets go of the daggers and argues that they no longer count as "on their person", then the daggers would be left behind in the ethereal plane when the character returns.
In short, either the daggers are carried with you, in which case they are shunted along with you, or else they are not carried along with you, in which case they are, well, not carried with you as you return to the material plane. You can't have it both ways. Any other interpretation means that teleportation and planar travel could easily separate you from all your clothing and gear, permanently, and enemies with the ability to teleport could instantly kill the player characters. You and your players probably don't want to live in a world that works like this. (In this way, my ruling is similar to the reason that fireball doesn't burn away all your clothes: because it's not fun to play in a world that works like that.)
Most teleportation & plane shifting spells are under-specified in this regard
Consider the "standard" spells for teleportation and planar travel, the aptly-named teleport and plane shift. Each one only specifies what happens to an affected creature, not what they're wearing or carrying. The same is true for many other similar spells, like teleportation circle, astral projection, misty step, far step, arcane gate, scatter, steel wind strike, word of recall, and of course, etherealness. In contrast, the only spells I can find that explicitly spell out what you can carry with you when teleporting are dimension door and thunder step.
The clear precedent seems to be that telefragging is forbidden
While the above mentioned spells don't spell out what happens to your gear when teleporting, there is one thing they are consistent on: only an unoccupied space is a valid destination for a teleport/plane shift. To me, this sets a pretty clear precedent that "telefragging" is not an intended mechanic in 5e. So unless you have a specific reason to go against it, I would recommend you stick with that precedent when making rulings. And speaking of rulings...
That's why there's a DM
So, the spells don't specify what happens to the stuff you're carrying when you teleport. Is this a problem? Did the designers forget? No. The rules aren't intended to exhaustively cover every situation. The introduction to the DMG says so explicitly (emphasis added):
The rules don’t account for every possible situation that might arise during a typical D&D session. For example, a player might want his or her character to hurl a brazier full of hot coals into a monster’s face. How you determine the outcome of this action is up to you. [...]
Sometimes mediating the rules means setting limits. If a player tells you, “I want to run up and attack the orc,” but the character doesn’t have enough movement to reach the orc, you say, “It’s too far away to move up and still attack. What would you like to do instead?” The player takes the information and comes up with a different plan.
Ultimately, it's up to you to make a ruling about whether you want to allow this in your game. You could accept your player's logic, or you could decide that you agree with my logic above, or you could decide something else entirely. As long as it makes sense for your world and doesn't unbalance the game, you should be fine.