Potassium Sorbate doesnt kill the yeast, it just stops it reproducing. So adding it while there is still a lot of yeast in the wine will slow it down but not stop it fermenting. The time to add it is when the wine is clear, as there is then so little yeast it cant ferment. So whats the point you may ask? Well if there is sugar left in the wine even the smallest amount of yeast can grow over time, so the sorbate stops that growth.
From Wikipedia..
Also known as "wine stabilizer", potassium sorbate produces sorbic acid when added to wine. It serves two purposes. When active fermentation has ceased and the wine is racked for the final time after clearing, potassium sorbate will render any surviving yeast incapable of multiplying. Yeast living at that moment can continue fermenting any residual sugar into CO2 and alcohol, but when they die no new yeast will be present to cause future fermentation. When a wine is sweetened before bottling, potassium sorbate is used to prevent refermentation when used in conjunction with potassium metabisulfite. It is primarily used with sweet wines, sparkling wines, and some hard ciders but may be added to table wines which exhibit difficulty in maintaining clarity after fining.
Some molds (notably some Trichoderma and Penicillium strains) and yeasts are able to detoxify sorbates by decarboxylation, producing 1,3-pentadiene. The pentadiene manifests as a typical odor of kerosene or petroleum.[8]
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