What is the purpose of 'Knome's or Elf's' ?

They come in your house in the fall and leave seed packets on the ground. They also break fridges, sinks, TVs, etc when they are angry. You give them gifts, if they don't like it they are angry, so you have to give them more gifts until they are happy. I sell them whenever they show up, that is their gift to my sim.

They're part of the Harvest Fest holiday and they do what the other poster described. If you don't like them showing up, you can edit the holiday and delete that part of the event or just do what you did. You can even go so far as delete that holiday all together if that's what you really want. Their actual purpose? Just part of the holiday fun, that's all.