In the above sutta the Buddha said that one knows every step one is untertaking. Whether it's walking, sitting, standing, lying down, bending etc. Does this imply simply awareness of body sensations (since the sutta is titled kaya which translates as body)?
How does this sutta then differ from Anapanasati Sutta?
First when you want a quick analysis of a sutta, you can consult Pya Tan http://www.themindingcentre.org/dharmafarer/sutta-titles-2/majjhima-nikaya
In mn119, there is nothing to understand. the buddha lists various ways to ''develop of mindfulness immersed in the body.'', including the jhanas.
To ''develop of mindfulness immersed in the body.'''', you can start with any paragraph, like this one
"Furthermore, when walking, the monk discerns that he is walking. When standing, he discerns that he is standing. When sitting, he discerns that he is sitting. When lying down, he discerns that he is lying down. Or however his body is disposed, that is how he discerns it. And as he remains thus heedful, ardent, and resolute, any memories and resolves related to the household life are abandoned, and with their abandoning his mind gathers and settles inwardly, grows unified and centered. This is how a monk develops mindfulness immersed in the body.
and you can continue to develop it, in other situations, by practicing other paragraphs like this one
"Furthermore, as if he were to see a corpse cast away in a charnel ground - one day, two days, three days dead - bloated, livid, and festering, he applies it to this very body, 'This body, too: Such is its nature, such is its future, such its unavoidable fate'...
some people claim that they have ''mindfulness immersed in the body.'' because they are good at practicing one paragraph only and are eager to say that they are good at mindfulness, instead of saying that they are good ''at developing mindfulness'', but having ''mindfulness immersed in the body.'' means precisely to be good at having ''''mindfulness immersed in the body.'''' in all the situations listed by the buddha, not just one.
It doesn't mean "awareness of body sensations" in both sutta.
It means "The practitioner should meditate ānāpānassati every time, no when&where is an exception (walking, sitting, standing, lying down, bending etc.)"
"Awareness of sensations" is virtual, IndriyaSaṅvaraSīla, and concentration meditation, Samādhi.
However, the Anupassanā meditation of sensations is in Vedanā-Cittā-DhammāNupassanāSaṭipaṭṭhāna of MN Mahāsatipaṭṭhānasutta. This section is about the comprehension of nāmas' origin.
Buddha taught only the first 1-4/16 steps (Samatha-meditation part) of ānāpānassati to the practitioner who interested in the beginning of the Ānapānassati-meditation, which was talked in the current conversation at the origin of Sutta. Ma. U. Kāyagatāsatisuttaṃ (body/kāya and sati in this sutta refer to kāya-anupassanā-satipaṭṭhāna):
"Just now, lord, after the meal, on returning from our alms round, we gathered at the meeting hall when this discussion arose: 'Isn't it amazing, friends! Isn't it astounding! — the extent to which mindfulness immersed in the body, when developed & pursued, is said by the Blessed One who knows, who sees — the worthy one, rightly self-awakened — to be of great fruit & great benefit.' This was the discussion that had come to no conclusion when the Blessed One arrived."
But Buddha taught the full version of ānāpānassati-meditation to Taruṇa-Vipassaka, the practitioners who had already meditated the first 1-4/16 (Samatha-meditation part) of ānāpānassati in the Buddhist Lent of Sutta. Ma. U. Ānāpānasatisuttaṃ, however, it was the end of that Buddhist Lent when they would go to the next step, the other 5-16/16 (vipassanā-meditation part).
So Buddha decided to remain at Savatthi for another month, pavāranā saṅgha, to turn those Taruṇa-Vipassakas enlighten Nibbāna easier by the other 5-16/16 (vipassanā-meditation part) between that the Buddhist Lent before they transport to the other country after Buddhist Lent because the transportation will make those Taruṇa-Vipassakas meditation dropping down. Then those practitioners enlightened in time, so Buddha concluded the 16 steps Ānāpānassati-meditation of those practitioners as the main content of Sutta. Ma. U. Ānāpānasatisuttaṃ.
...
"Monks, I am content with this practice. I am content at heart with this practice. So arouse even more intense persistence for the attaining of the as-yet-unattained, the reaching of the as-yet-unreached, the realization of the as-yet-unrealized. I will remain right here at Savatthi [for another month] through the 'White Water-lily' Month, the fourth month of the rains."
...
Now on that occasion — the Uposatha day of the fifteenth, the full-moon night of the White Water-lily Month, the fourth month of the rains — the Blessed One was seated in the open air surrounded by the community of monks. Surveying the silent community of monks (the silent means all practitioners there have already enlightened and sitting with attainment in Phala-Samāpatti), he addressed them:
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"In this community of monks there are monks who remain devoted to mindfulness of in-&-out breathing.
...(full 16 steps of ānāpanassati meditation)...
