Might have been k-nearest-neighbors rather than k-means. Knn can be used for "recommended because you bought X" or "users like you also bought X" type recommendations that relate user to user or item to item.

K-means could potentially be helpful to group together common users/items if e.g. you're memory constrained and don't want to give each user a fully unique embedding entry so that's also possible.

I'm no expert in ML, but beyond the research and emerging work in unsupervised learning clustering seems to be the most common approach, and there's nothing conceptually new here in the past 10+ years. Don't get me wrong, computationally we can do stuff with a ridiculous # of dimensions that was hard/impossible before and there are new algorithms but I was doing KMeans and DBScan/HDBscan and Gaussian mixtures in grad school 15 years ago in relation to databases, I had never heard of "Machine Learning" and we were in the glacial stage of the AI winter. There's some newer work that is based on human judgement for results but clustering still seems to be the mainstream "data validated" approach...

it's still widely used and can be validated without significant human judgement. Implementations are more efficient, and computatal complexity is through the roof but the approach is still legit.