What does knock sensor do on a 1989 Toyota 4 runner v 6?

When engine starts to ping there can be damage internally in the engine. The knock sensor determines that the engine is pinging internally, due to certain vibrations it picks up. It relays this information to the onboard computer. The computer then changes the fuel timing to the injectors, sometimes cutting it in half, so the damage is slowed and giving you time to repair the problem. That is a simplified version af a process.

What you feel is a lack of power when you step on the gas. Some loss of gas mileage depending on your load.