Potassium Permanganate isn't bad to have around. But it isn't really the first, or even third, choice for water treatment. My current thinking is that there is not much use for it in of short term survival use.

A few grams in the medical kit allows you to make quite a large quantity of anti-fungal solution to treat athlete's foot, 'gook sores', ringworm. Hard to say how much a gram will make. I mix it by sight. A light pink color is about right for foot fungus and figure a gram might make a quart or two of anti-fungal solution. Mixed up an ounce or two at a time you might have thirty treatments in a five gram supply. Which makes it very efficient in terms of weight and bulk.

Potassium permanganate, sodium hypochlorite powder and iodine crystals have a place in longer term situation. Particularly where there are numbers of people.

Of course you have to be careful. If you do use potassium permanganate you don't want to get it on your hands and don't allow it to contact other materials. Potassium permanganate is a strong oxidizer and it can cause many common materials to smoke, catch fire, and potentially, explode. You don't want to let it, or any of these chemicals, to get away from you.