Plot hole: At the end of the episode, KITT has to travel about 45 miles in under 8 minutes. That means KITT would have to travel a little under 360 mph for the entire time. KITT couldn't travel that fast until season 4 when he got Super Pursuit Mode, and we never see the speedometer read that high even once.
Continuity mistake: When Gina locks the door after Michael leaves, the close up of the lock is different than the one on the door. On the door, the top of the faceplate is right next to the deadbolt knob, but in the close-up there's a lot more space that you can't even see the top of the faceplate.
Visible crew/equipment: When Michael is on the beach after finding the body, the camera is on K.I.T.T. In the rear wheel, you can see the reflection off all the crew standing. This can also be seen in the next scene in the front wheel along with the reflection of the lights.
Continuity mistake: When Michael and Dr. Bergstrom get out of Goliath, the back door is still open. We see both get into K.I.T.T. at the same time since Bergstrom needs Michael's help walking on the hood. But once they're both in the car, the back door is closed and locked without Michael having a chance to. And if the door can close automatically or remotely, then it should have closed with Michael inside.
Continuity mistake: Right after Michael escapes from his cell, he finds KITT in the garage. Michael has KITT pop his hood to work on him, he asks KITT how he feels, the next shot shows KITT's scanner with the hood down, then it goes back to the shot of Michael and the hood is open again.