Continuity mistake: Even after KITT's voice modulator changes to the three bars in the episode "Hearts of Stone," any shot of KITT starting himself up still shows the old voice modulator (a simple red square).
Continuity mistake: In the first few episodes watch KITT's glowing square. In some scenes the flasher says KNIGHT 2000 and other times it does not.
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"