They're half supposed to represent that but Paradox will not make the number of people they represent dynamic for no real gameplay benefit so they just make them eat 1 supply (could also be explained by the knights bringing their own supplies from their villages)

No they dont represent all that coz they only eat supply as 1 soldier.

Akchually in the game one knight represents a knight, his squire, his servants, and 10-20 bodyguards. And they're all well equipped, unlike the levies that they slaughter. 20 well armored soldiers (aka "one" knight) slaying 150 cabbage farmers who only have one simple helmet and one spear each is actually very realistic for medieval combat.