As of Version 3.14, kvoption does not seem to process options passed to a style file, if the style file is in a higher level directory than the tex file.
The enclosed example works if kvoption_test.sty is in the same directory as kvoption_test.tex, but does not work if it is in a higher-level directory.
kvoption_test.zip
I have seen this version with he latest TeX Live updates under both macOS (TeX Live) and Windows (MikTeX).
I hope this can be fixed quickly, as I often use this feature to have a common style file for a series of documents.
Cheers
Ian