Continuity mistake: When Michael and K.I.T.T. go to rescue LT. Ladd off the firing range,the steering wheel isn't K.I.T.T.s usual steering wheel, it has metal bars coming out to the handgrips.
Continuity mistake: When Michael starts to scrape the blue paint off the shell, he scratches across the blue band and you see a few scrape marks where the paint is gone and it's white, like the shell, underneath. In the close up, it's slowly scraping such a small potion of the paint off and you see it's yellow underneath now.
Continuity mistake: When Michael notices the accident report folder, the folder is touching the red candy basket. When goes to steal it by putting it under the basket, the folder is now further away.
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"