I see that KDFs should be used in systems that rely on PSKs, but what practical benefit does it provide?
For instance, suppose the system relies on a shared secret for AES encryption and decryption. If the en/decryption uses a key derived from a KDF, an attacker could still sniff the key and decrypt the file. Yes, the key could be regenerated using the secret, but for the purpose of en/decryption, it would remain fixed unless compromise is detected.
So, under what scenarios does KDF increase protection? Is it just to increase the entropy of the key so that it'd be harder to crack?