Engine knocking noise after oil drained out do to drain plug falling out

The damage has been done to the bearings already. They have a clearance, or gap, between moving parts in the order of .005", give or take a couple of thousandths. That's the thickness of three sheets of paper. Within just a few seconds with no oil pressure, those bearing surfaces will begin to be chewed away. The increased clearance leads to the hammering sound heard as knocking. The bearings are highly-polished smooth metal strips made up of three layers of metal. The first layer is very soft so dirt particles can become embedded in them rather that scratching the highly-polished crankshaft "journals" those bearing ride on. Once that soft outer layer starts to become chewed up, that damage progresses and the knocking gets worse very quickly.

That increased clearance lets the pressurized oil seep out much too quickly. That reduces the flow of oil to all the other critical places, so more damage occurs. The repair is to rebuild the engine with mostly new internal parts. Given the age of the car, a more common solution is to replace the engine with a good used one from a salvage yard.

For related information, take a look at this article:

https://www.2carpros.com/articles/high-or-low-engine-oil-pressure

A typical engine bearing is shown in step 6.