I think you're mistaken, we see everything through the point of view of the witness.
- Sophie running into an alley, upset
- the drunken prince stumbling after her and shouting
Then we only hear the argument between them and the sound of a blade.
- Then we see her leaving on the horse, presumably lifeless.
- Then we see the horse returning home, alone and with blood on it
- Then Sophie's body is found in the water
At no point we actually see any actual stabbing being performed, we just assumed it happened based on what is shown to us.
The prince was probably drugged: we also see him and Sophie drinking before the fight. Everything was planned and arranged to look like a murder committed by the prince.