And if we want to apply the change in potenial to the energy theorem , we have analyze an isolated system. (an isolated system is a collection of all objects being accelerated and all objects causing a force.) ie delta k + delta U = 0 is applicable to an isolated system ONLY.
For some object falling towards earth, isolated system is just object and earth.
delta k + delta U = 0
1/2mVf^2-1/2mVi^2+CHANGE IN POTENIAL DUE TO THE FORCE OF GRAVITY=0
1/2mVf^2-1/2mVi^2-GMm/Xf+GMm/Xi=0
1/2mVf^2-1/2mVi^2=GMm/Xf-GMm/Xi
Xf is smaller than Xi, so RHS is +ve, which means final KE is greater than initial KE, and this makes sense for objects falling towards earth.