You are again creating mocks where you shouldn't be. You say you want to test the static method createImageFileBasedOnStream() method and yet you have mockStatic(KVSClient.class). This means that the call you make on line 20 is done on a mock object. You don't seem to understand how completely wrong this is, and pointless. You do NOT test mock objects.
Here's the biggest trap you're falling into. Somehow you've convinced yourself that your test is at least partially "working" and therefore valid. It is, however, invalid because you're not exercising any real code. You're only exercising mock objects! That is, you're creating mock objects, telling them to react in certain ways, then you're invoking the mocks, and then verifying that they actually did what you told them to do in the first place! Of course it's going to look like your test "passed"!
Line 16 in your test says "Ok, PowerMock, mock out any static methods of the KVSClient class." PowerMock dutifully mocks (creates a "fake" object that looks like) KVSClient and intercepts any calls to KVSClient static methods. That means that a call to KVSClient.createImageFileBasedOnStream() will no longer go to the actual code you say want to test but will get rerouted to this fake object that looks like a KVSClient.
Line 20 makes a call to that fake version of KVSClient.createImageFileBasedOnStream() method. Again, this is not the code you said wanted to test that is executed. This is a MOCK implementation that's being called (because you made this happen by writing line 16)
Line 24 you tell PowerMokito to verify that the static method on KVSClient.class (which you have mocked up with line 16) was called. Essentially, you're saying, "Hey, PowerMock, verify that I actually made the call that I just made on line 20."
Do you see how silly and useless this test is now?
If you want to see proof for yourself, put a breakpoint on any line of the static createImageFileBasedOnStream() method and run your test in debug mode. Execution will never go into the real code and that breakpoint will never be activated unless you delete or comment out line 16.