There are $4$ possible cases :
$(A)$ Both $P$ and $Q$ are knights
It means both statements "Both of us are Knights" and "None of us are Knaves" are true which is not contradicting our assumption. So, It is a possible case.
$(B)$ $P$ is knight and $Q$ is knave
It means statement "Both of us are Knights" is true but it is contradicting our assumption. So, It is NOT a possible case.
$(C)$ $P$ is knave and $Q$ is knight
It means statement "Both of us are Knights" is false and statement "None of us are Knaves" is true but this statement by $Q$ is contradicting our assumption . So, It is NOT a possible case.
$(D)$ $P$ is knave and $Q$ is knave
It means statement "Both of us are Knights" is false which means at least one should be knave which is not contradicting our assumption and statement "None of us are Knaves" is false which means at least one should be knave which is also not contradicting our assumption. So, It is a possible case.
So, It is possible that both $P$ and $Q$ are knights and it is also possible that both $P$ and $Q$ are knaves. So, we can't identify them.
Hence, Answer is D.