Feature selection where adding features are deteriorating model
I guess the measurements from accelerometer-gyroscope-magnetometer are noisy and redundant in some sense. This means you can find some sort of correlation among the values of the measurements, for instance a correlation between the values from the accelerometer and the gyroscope.

PCA captures the principal directions of variation on your data, removing the correlation between the measurements and also reducing the noise, therefore increasing the accuracy. From the graph it can be seen that the accuracy just diminishes a little when using all the features.

Other factor I will consider is the magnitude of the features, a feature with a very large magnitude affects the behavior of K-NN.