A Knight in Shining Armor - S2-E13
Other mistake: After stopping Stone, Michael calls for KITT. When the car starts up, it's in gear, and the selector goes to P (park). After pinpointing the hidden entrance, the picture is of soft sand hills covering it. When KITT goes to enter, it's a defined entrance with a thin layer of stacked rocks in it.
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"