It has a very definite bias in the topics of blogs/websites that it finds which is partly an artifact of the kind of person likely to have such a site but also where they sourced it from (I think they might have started with a HN Blog roll or something). But I agree that it's generally interesting sites, and I find myself going back to it every couple of weeks for a while. It reminds me of a more substantive version of "StumbleUpon" from back in the day.

Thanks for reminding me about this! I just discovered three interesting blogs within a few minutes.

but Kagi uses third party indexes anyway (ie, google). So, if google does not index small websites, how can Kagi show them?

They augment those with their own index (named teclis).