I'm not a fan of how KJ is used at the moment, but then again out of his 13min TOI he spent 3.20 on the PP with the best, so at least there's that. I think it's a bit early to judge his usage. Long term it makes no sense to play him with bottom-6 grinders, but for now I think it could be ok. I don't know Larsen's reasons, I can think of a couple myself, like managing his workload over a 82 game season and giving him a bit more time to adapt to the NHL game in smaller role with less expectations and pressure. It might very well just be Larsen is seeing a couple of niggles in his game which he wants him to fix before he'll give him the big minutes.
There's 65 games left in the season, there's no rush. Parts of his game absolutely look top line worthy already, like it seems to me he's already clearly the best fit with Gaudreau offensively (aside from/with Laine perhaps). His vision seems top notch, but I also see him make some mistakes I think might just be a matter of getting adjusted and understanding how much time he has in the NHL and the plays he can and can't get away with. Then again everyone makes mistakes and his might stick out a bit more to me simply because I'm playing closer attention.
I think things are ok for now, but going forward I'd like to see him play more minutes and with more talented players, but whether that happens 20 or 50 games into the season doesn't necessarily make a big difference to me, this season to me is all about development with KJ.