Not sure if this is possible. When using record rules on a form submission, it is possible currently to update a field of all connected child records. It doesn't seem possible to update only one child record, probably because Knack wouldn't know which one to update. So would it be possible:
a) To have an option: Update latest child record?
b) To have a filter criteria on the child side as well. So currently the rule triggers when a field on the parent object matches a certain criteria. Could one add a criteria on the child side as well, e.g Update only if Field 1 is blank?