That’s a response I hate most when talking to someone. Imagine you’re excitedly talking about something of your interest, something that you’re confident with your understanding about it. Something you’re desperately want to tell. Then in the middle of your spirited explanation, your conversation partner cuts you, ‘Yeah I knew, I knew’. Whether it’s being said for the whole topic or just for a small, intricate detail of your talk, it’s just annoying.
It might be a warning that your partner is not interested anymore with the topic you’re talking, but not always. Maybe your partner doesn’t respect you and he wants to piss you off, but this is a rare case. One obvious thing is that he’s tired with your overly-long speech. If you hear this, you’d better speed the things up, omitting small details until he asks you for deeper explanation. Try to regain the lost momentum.
An interesting thing I’ve recently realized is, you might have put your conversation partner to an identical uncomfortable situation when he feels an urge to utter that very line. Put yourself in this situation, you’re an expert of a certain topic, revered by others as The Guru. And then a n00b comes, start talking about a related topic, and when the conversation comes to the matter of your expertise he begins explaining every detail as if he was teaching basic arithmetic to an imbecile. Of course you’ll feel both bored and offended, and want to cut the stupid talks soon before it’s going nowhere.
Whether the situation might be, using the phrase ‘I already knew it’ to cut a conversation is not something pleasant for your partner. Both parties lose, since the one who puts the other into an uncomfortable situation now finds himself in the same uncomfortable situation too. For the one being offended (with tl;dr explanation or story), it would be better if he use a more polite, subtle way. He could carefully interrupt the talk and redirect the conversation to proceed to the next chapter. A phrase like ‘Oh, I see’ is a better option to interrupt the partner, since (in normal situations) it also shows your respect to the one who’s talking and your interest in the topic he’s talking about. This way, everyone profits.