I've recently come across a situation where one system passes an encrypted payload to another system. The payload is encrypted using a pre-shared key. However, instead of just using the key itself, a calculation is made using the current day and month to produce an integer value. This value is then used to retrieve a substring of the key. So if the output of the calculation is 10, the key used to encrypt the payload is a substring of the original key beginning at the index of 10. Both systems have this logic.
I understand this prevents someone who possesses the key but not the aforementioned logic from decrypting payloads, but is this necessary or an industry standard solution to this problem? I've never encountered it before and I'm not sure what terms to use for further research.
Any insight is appreciated!
EDIT: I suppose the original "key" isn't really a key...it's a password the keys are derived from.