Yes to the action, no to the bolded part. You'd still have the same momentum. You'd need to "spend" that somehow. As written above, you'd reduce the falling damage from 50ft worth to 20ft worth. Have the misty step spit you out going up from the ground and you'd still have momentum carrying you up into the air...only to fall back down. Again, you'd reduce the falling damage but not negate it.For example, on your turn you use movement to jump off of a 50 foot cliff. Then after you have dropped 20 feet you use misty step to misty step to the ground and land without taking any falling damage.
Would you allow this?
Exactly. The proper answer to this question really depends upon whether the PC is Coyote or Roadrunner.Only if you were in a falling elevator or a crashing cartoon plane