In modern day I have seen many examples of knowing but not understanding.

Every modern manager knows employees are the biggest asset of the company. But very few actually understand that.

Which (to me) means that I can know something by heart, but that is much less than understanding what and why that actually means.

Yes, exactly! Knowing that can't be used effectively, but one can still know it and repeat it numerous times. It's kind of similar to 'talking the talk, and walking the talk'.