Continuity mistake: When Michael finds the stolen moving equipment, he parks KITT and then starts to climb down an embankment. The close-up shot of KITT's scanner reveals a tree in the hood's reflection. But when we saw KITT stop, there wasn't a single tree around.
Revealing mistake: The shot of KITT releasing his oil slick at the end of the episode is backwards: "KNIGHT" appears as though it's in a mirror.
Continuity mistake: When KITT is pushed over the mountain by the earthmover, you can see the front bumper is actually a stock Trans-Am bumper instead of KITT's normal one.
Answer: KITT didn't choose to go off the cliff in Goliath Returns, it just happened as he tried to avoid Goliath. Just 'cus it happened, doesn't mean It's gonna cure his fear of "flying"