If a Young Black Dragon has flying 80 but is circling 120 feet above the party, would you let it not spend movement for the 120 foot dive or rule that is can't reach the party because it only has speed 80 flying?

I would rule that it can move 80 feet in any direction on its turn during an encounter, freefall or no. Doing that might make the players resent this, as it kind of seems like the DM wants to pull one over on the players instead of making a fair fight. 

On the other hand, if this isn't supposed to be an encounter, but rather "the dragon swoops down, attacks, then retreats to its lair" and the players then have to hunt it down, I'd say yeah that's okay. 

I'd just say 80 feet for the sake of consistency and simplicity.

The more laborious route would be:  The dragon enters freefall, essentially using a free action to fold up their wings and drop prone.  They would normally hit the ground right away, but then they use half their movement to arrest the dive in the last 40 feet, analogous to standing back up from prone.  Then they do their attack and, if this is legal, still have 40 feet of move left.  This seems a little bit like you're trying to slip one past your players though, so I'm not sure I'd use it.

I just used a dragon as an example because it has a high flight speed. 

I totally get flying up will have normal speed, and horizontal movement is normal speed. During a turn a creature can fall 200+ feet for "free" so why would their flight speed limit a dragon or Aarakocra in vertical movement if they are going down?

Why is it circling at 120 instead of 80? Is it just to stay out of range of certain attacks?

I get that dives are a thing and diving is cool, but if I was a player here I would feel a bit cheated. Flying is already a huge benefit, and a fly speed of 80 is already a lot. Giving yourself the ability to cruise even further outside of attack range while still preserving your own ability to attack just feels unfair.

Then again it's a dragon, so maybe you're going for unfair? But in those cases I try to use language that makes it clear they are not in control of the situation. If the dragon is out of attacking range, I'd just say that rather than give a fixed distance that automatically leads players to think of spell ranges and the like. If you're going to fudge things, just be open about it.

Quote from Wysperra >>

During a turn a creature can fall 200+ feet for "free" so why would their flight speed limit a dragon or Aarakocra in vertical movement if they are going down?

RAW?  Here's XGtE (I don't have a page number):

The rule for falling assumes that a creature immediately drops the entire distance when it falls.

Then there's an optional rule that says 500 feet/turn, but no sign that any fall under 500' is recoverable.  Now, we've all seen birds and know this isn't realistic.  And we've all seen movies and know this isn't cool.  But it's probably an area where you have to set an arbitrary rule somewhere.  

Quote from scatterbraind >>

Why is it circling at 120 instead of 80? Is it just to stay out of range of certain attacks?

I get that dives are a thing and diving is cool, but if I was a player here I would feel a bit cheated. Flying is already a huge benefit, and a fly speed of 80 is already a lot. Giving yourself the ability to cruise even further outside of attack range while still preserving your own ability to attack just feels unfair.

Then again it's a dragon, so maybe you're going for unfair? But in those cases I try to use language that makes it clear they are not in control of the situation. If the dragon is out of attacking range, I'd just say that rather than give a fixed distance that automatically leads players to think of spell ranges and the like. If you're going to fudge things, just be open about it.

 OK then switch the nouns around and make it a party of PC Aarakocra (like I said). I'm not planning anything just trying to get a feel for how to run it. 

At about 1:02 that is not flight, that is falling (with style).

At about 2:12

0:17 that is not active flight.

Quote from Wysperra >>

Quote from scatterbraind >>

Why is it circling at 120 instead of 80? Is it just to stay out of range of certain attacks?

I get that dives are a thing and diving is cool, but if I was a player here I would feel a bit cheated. Flying is already a huge benefit, and a fly speed of 80 is already a lot. Giving yourself the ability to cruise even further outside of attack range while still preserving your own ability to attack just feels unfair.

Then again it's a dragon, so maybe you're going for unfair? But in those cases I try to use language that makes it clear they are not in control of the situation. If the dragon is out of attacking range, I'd just say that rather than give a fixed distance that automatically leads players to think of spell ranges and the like. If you're going to fudge things, just be open about it.

 OK then switch the nouns around and make it a party of PC Aarakocra (like I said). I'm not planning anything just trying to get a feel for how to run it. 

 Oh yeah I'd absolutely say no a PC doing it. Or rather you can totally dive in a super cinematic way, it just doesn't impart a bonus to your movement as breaking out of the dive is a nontrivial maneuver. As I said before, flight is already super strong in this game. It does not need an additional buff. And that's coming from a guy who did his "favorite animal" report on the peregrine falcon in 5th grade.

Now if the whole party could fly I could get behind a diving houserule that applied to both sides, but there are a lot of balancing mechanics built into the interplay between attack ranges and movement speeds and when you start to mess with that you can get unintended consequences. It also puts you on a slippery slope where PCs can argue stuff like, "well if he can dive for free movement then I should be able to commando roll an extra 10ft down this slope." Suddenly every bit of RP flavor has the possibility of imparting a mechanical bonus and that spins out of control pretty quickly with some players.

All of these kinds of actions can be roleplayed without an additional mechanical benefit. Since adding those benefits can be problematic, I just don't see a reason to do so. It's adding complexity to the game (and slowing it down) without adding any more depth.

Quote from scatterbraind >>

All of these kinds of actions can be roleplayed without an additional mechanical benefit. Since adding those benefits can be problematic, I just don't see a reason to do so. It's adding complexity to the game (and slowing it down) without adding any more depth.

This gets at my problem with it.  I believe the reason the fall rule was written to be instantaneous under 500' is nothing to do with aaracockra players; but rather to avoid the endless conversations about whether an elf can pivot in midair, tie a grappling hook to a rope and the rope to an arrow and then shoot the hook onto a ledge and swing back up into the fight in under six seconds.

Quote from scatterbraind >>

Quote from Wysperra >>

Quote from scatterbraind >>

Why is it circling at 120 instead of 80? Is it just to stay out of range of certain attacks?

I get that dives are a thing and diving is cool, but if I was a player here I would feel a bit cheated. Flying is already a huge benefit, and a fly speed of 80 is already a lot. Giving yourself the ability to cruise even further outside of attack range while still preserving your own ability to attack just feels unfair.

Then again it's a dragon, so maybe you're going for unfair? But in those cases I try to use language that makes it clear they are not in control of the situation. If the dragon is out of attacking range, I'd just say that rather than give a fixed distance that automatically leads players to think of spell ranges and the like. If you're going to fudge things, just be open about it.

 OK then switch the nouns around and make it a party of PC Aarakocra (like I said). I'm not planning anything just trying to get a feel for how to run it. 

 Oh yeah I'd absolutely say no a PC doing it. Or rather you can totally dive in a super cinematic way, it just doesn't impart a bonus to your movement as breaking out of the dive is a nontrivial maneuver. 

 

 That is actually a very good explanation. The flyer is just not strong or skilled enough to break a fall faster than their movement speed.