Revealing mistake: As KITT is rolling down the hill with the unconscious Michael inside, the shots of KITT from the outside show that the bonnet and roof have large and obvious gaps between them and the rest of the bodywork (presumably a stunt vehicle). When KITT fires it's turbo boost, the bodywork is its normal flush self again.
Visible crew/equipment: As KITT starts back up the hill, if you look at the lower left side of the screen as he starts up, you see a black cable pulling the car.
Visible crew/equipment: At the Victory Academy, as the group walks by the brown sedan, the light rigs and camera crew and equipment is reflected on the side.
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"