You trade up. I have a friend who has thousands of dollars worth of CS items, he has never spent a single cent on any of them - you play, you gain some items, you sell them which adds money to your steam account, you use that to buy something else you think might be worth something in the future.

So kids aren’t actually spending any money?

They are. But most of the time they are spending $2 here and there, which is much easier to convince your parents to borrow a credit card for. After all parents are already spending millions(billions?) of dollars on roblox, what's a few dollars for yet another online game. Kids aren't the ones buying $20k skins, but kids are definitely an important part of this economy.

Kids aren't the ones spending $12k on rare skins, they're buying keys to open lootboxes.

Same question. How are they buying things online at all? Whether $12k or $1.20?

Counter Strike has weekly drops, you get a case and some random skin. Usually those are not worth much themselves, except maybe for the case. People then sell these weekly drops on the community market and get Steam balance. Sell enough to afford a key (+case).

In other cases kids might have access to their parents payment methods, or they can buy prepaid cards from places like gas stations. I used to do this to buy games when I was younger and my parents wouldn't buy games for me.

Valve doesn't prevent anyone from opening cases. There is no KYC.

There's a lot of assumptions in your comment, such as that people under 18 don't have their own money, that their parents monitor it, that it should be a secret, etc. And maybe that only under 18's spend money in video games, but I haven't read the article in detail, don't know if it's mentioned.

No, those are your assumptions, not mine. I asked because most electronic payment methods I know of are not available to minors.