I think they only stopped selling tickets on the New York - London sector, therefore the route is sold as a journey between New York and Kuwait, and as Israeli passport holders aren't allowed into Kuwait it gets around discrimination laws.
There is also a Manila - Bangkok sector where the question of Israeli passport holders could come up but the fifth freedom rights are currently suspended by the Philippines in a dispute overt traffic rights in the Middle East for Philippine carriers.
Kuwait Airways website has no provision to enter "Israel" as country of birth or citizenship so Israelis can't buy tickets.