It doesn't mean the engine is knocking, it means the knock sensor is not working.
A knock sensor is basically a small microphone. It can 'hear' if the engine is knocking and tells the ECU to adjust spark and timing to compensate.
Years ago my wife's Toyota Camry threw this code and we ignored it for more than 10 years with no noticeable effect. The car had two of them and they cost only $50 each but more than $1000 in labor as you had to take most of the motor apart to get to them.
Never had to replace one so don't know what's involved but judging by the look of it it's an easy part to swap out. Here's one on eBay that gives you the part number:
Find many great new & used options and get the best deals for HONDA CBR600RR CRANKCASE KNOCK SENSOR SPEED SENSOR 30530-MFJ-D01 CBR 600 RR pw at the best online prices at eBay! Free shipping for many products!