If the knee was a ball-and-socket joint, how would movement be affected?

The knee is a hinge joint. If the joint were to be ball and socket, it would be maneuverable in three dimensions, rather than two. At the same time, it would be less strong than it is as a hinge; ball and socket joints are easily dislocated and lack the strength to move in a single direction.

Knee joints are designed to move in only two directions because the lack of side to side wobble prevents the leg from bending to the side and falling out from under a runner, and improves stability on uneven surfaces. In addition, the way people walk has no need for side to side motion in the knee joint, as it would only make it harder to keep in a single direction.