It is possible to rewrite all of Sir Gawain and the Green Knight in the style of a Charles Perrault fairytale. As the question places an emphasis on honor and truth, considering focusing on Gawain’s deception. Gawain did not stick to the deal that he made with the lord. He did not give his host everything that he received that day. This leads to him actually being vulnerable in his upcoming encounter with the Green Knight.
The other parts, like the description of the holiday celebration, might not require so much attention. Perhaps they can be addressed in a sentence or two.
Overall, the rewrite should probably embrace simple language. Perrault’s fairytales are quite easy to read. They don’t rely on esoteric terms or complex phrasing. They are straightforward and clear.
Think about how Perrault begins “Puss in Boots” or “Blue Beard.” He describes the main characters and the circumstances right away. One could rewrite Sir Gawain and the Green Knight in a similarly upfront manner.
Think about starting the rewrite like this: There was once a Green Knight. This Green Knight visited the court of King Arthur during the holiday season. The Green Knight wanted them to play a game.
In a sense, rewriting the poem is like a form of translation. It’s turning the epic poem meant for adults into a shorter fairytale intended for children.