Other mistake: Just after Michael finds Devon in the trailer, as he gets in K.I.T.T you see him put the gear into D and then he reverses. Then it shows you him putting the gear into R and then drives off. Looks like they got the footage the wrong way round in the edit.
Continuity mistake: When you see Bonnie and Devon in the audience waiting for Michael and K.I.T.T to perform, sitting next to Bonnie is a guy in red shirt. In another shot of the audience the same guy can be seen sitting higher up in the seating area and sat with other people. When you next see Bonnie and Devon, the guy is back sitting next to her.
Revealing mistake: When Michael and K.I.T.T turbo boost the flame thrower and disable the fire engine, Michael says to K.I.T.T "get the clown." During the shot prior to K.I.T.T pinning the clown in you see the hands steering K.I.T.T appear above the dash.
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"