In certain movement events, the game sets something we call a Fall Position. If you were to fall ~200 units below this Fall Position, the game puts you into flailing mode. This is what gives you fall damage. The game sets the fall position:
at the peak of a short hop
at the transition from Air Trick mode into Falling mode
The idea here is that you can set your Fall Position to a low altitude, then climb to a greater height while avoiding setting a new Fall Position by not doing the things outlined above. If you fall from that greater height with your low Fall Position, that's called a Perfect Fall.
Watch fuse's tutorial for more details.
[If Twitch is being dumb and failing to load the embed, the link is here]