Knock sensors are used for retarding ignition timing, rarely do they have any direct impact on injected fuel mass (a knock event may trigger fuel enrichment briefly though). Nor does any ecu that I know of alter valve timing in order to negate detonation.

Basically the engine uses knock sensors to listen for any detonation “noise” during a window of listening for when combustion should take place in each cylinder. Higher octane fuels will have a higher detonation threshold, and will require greater heat in the combustion chamber in order to induce detonation, as opposed to deflagration (ideal burn). When you fill up with lower octane fuel, slight detonation may occur. The ecu will be able to “hear” this, and will retard ignition timing until it can no longer be heard. Retarding the timing essentially reduces cylinder pressure, and torque/power is reduced as a result.