It sounds like you're doing everything right!
There should not be a bad effect from adding KNO3. It could be that your plants need more potassium (the K in the KNO3). My fishfood analysis (p. 88 in my book) shows fishfood provides 3.3 times more nitrogen than K. If your tank is low in N, then it could be VERY low in K.
If your tank water is soft or borderline soft, then it doesn't begin with enough potassium. Hardwater usually has enough potassium.
When you add KNO3, you stimulate plant growth by giving them a very important nutrient (potassium). The stimulated plant growth may keep the algae in check. I see nothing wrong with adding KNO3 in the amounts you describe.
If your water is soft (GH less than

, you might want to increase your water hardness so that plants also get enough calcium and magnesium.
Diana Walstad