On the small scale, no, it's not pay-for-what-you-use. Imagine though you're an enterprise, running a large K8S cluster with lots of workloads inside. By using Knative and scale-to-zero, now you can pack more lightweight workloads into the same cluster resources, because the pods scale down when they're not actively being used. It gives you (as the cluster operator in your company) the ability to run your cluster the same way serverless works in the cloud.
The exact economics depend on where the billing boundary falls. For on-prem the economics will probably follow one of central IT budget, showback or chargeback and I expect the case for hugging the curve as tightly as possible is weaker.
For cloud providers the boundary is likely to become execution-seconds. As Kubernetes worker nodes become abstracted away this will be the remaining way to track utilisation.