> Knight, seeing what the student was doing, spoke sternly: “You cannot fix a machine by just power-cycling it with no understanding of what is going wrong.”
> Knight turned the machine off and on.
> The machine worked.
In the novice's particular case, Knight understands what is actually wrong with the machine, and that in this case it will be fixed by turning it off and on again, so he does that.
The idea that in such a situation the machine wouldn't be fixed by power-cycling it when the novice does it, but would when an expert with deep understanding does it, is a joke.
The joke is mimicing the form of a Zen koan. Koans often play with contradiction, I think with the idea of shaking the reader out of simplistic black-and-white thinking into something more holistic and less dichotomizing. I don't think "you need to understand things deeply and not just make random easy changes in the hope of fixing them, but sometimes it happens that those random easy changes are what's actually required" really counts as the sort of holistic non-dichotomizing thing Zen is trying to teach, but it's kinda in the right ballpark.