Could you please show the output of
cat /etc/apt/sources.list
To me it looks like the system is looking for the key in a different location (in /etc/apt/, which doesn’t seem completely unreasonable in general), I’m currently reading up on how and where which keys are stored for Debian-based systems like Kali, and where those locations are defined…
Edit: actually, the very first remark in this post references the sources list
@yoitsdope please let us know what exactly you “updated” there