It was the right call, only because the KU player led with the elbow then pivoted. If he had pivoted simultaneously without "swinging" his elbow while chinning the ball, it wouldn't have been a foul. Knight was wrong on this case, but in theory he was correct.
I know in college that is one of the first things we as guards learned to do...if you catch it on the wing with a defender up in your business, rip it through underneath and then over the top to clear space. If you do it right it won't be a foul if you catch the defender on the chin.