Your usb stick has failed.
Some drives return different sizes when they fail, although I've only read about this with regard to "SSDs", which have more complex controllers.
To double-check the size of the drive as a whole, I would use
lsblk or look in the kernel log
dmesg. (The size of partitions within the device could be completely bogus depending on the partition table; you could contrive this without having a hardware failure).
If the size was OK, there are ways you could try to recover important data. But it doesn't sound like you need to - you still have access to the Kali ISO file.
Simple usb sticks aren't designed with any extra hardware diagnostics[*]. Once you know the hardware has failed, that's it. Either of the size of the drive as a whole going wrong, or the drive not returning the data you wrote to them (suggested by failure of
fdisk), would be enough to indicate such failure.
[*] I think they're not even designed for uses where the maximum expected re-write cycles of flash storage becomes an issue. They're much more likely to just break, or be lost.