Mark's Answer is correct and very good, though I can expand upon it.
Maryland's law on knives is Title § 4-101, which, in plain English, forbids switchblades, fixed blade knives ("Dirks" and "Bowie knives"), throwing stars, and old timey straight razors. It makes a specific exception for "penknives" as being legal.
"Penknife" is not defined in the statute, but a series of case law decisions in the state of Maryland, including the MD Supreme court and a few federal cases, have established that there is no legal length limit, a locking mechanism is irrelevant, and that the burden lies with the state to prove that a given knife is NOT a penknife. I have not located a single conviction in the MD court system for possession of a butterfly knife. That is, excluding cases where their were other crimes being committed such as assault or robbery, wherein the arrest has little or nothing to do with the knife, but rather it;s unlawful usage.
As a practical consideration, a large number of stores in MD sell butterfly knives right along side regular pocket knives out in front in the glass case. This includes many stores I know whom police are also frequent customers.