Acharya Prashant explains that knowledge becomes a bondage when an individual identifies themselves with it. He clarifies that knowledge itself is inert and limited, but it becomes a shackle for the one who defines their identity based on what they know. Since knowledge relies on the brain, memory, and physical senses, it is inherently tied to the body and the material world. While knowledge is useful for worldly survival, it cannot lead to liberation because it is entirely worldly. True liberation belongs to the one who has transcended knowledge and found an identity beyond it.