I have an idea on why the pedal drops.
If we look at the picture below we can see that after the brake pedal has moved a little the piston has blocked of all the inlets from the master cylinder reservoir, but a port from the reservoir has been re-opened behind the piston to prevent a vacuum. At this point the brake cylinder pistons should start to move forward pushing the brake pads against the rotors, but if the solenoid valves that operate the ABS system are leaking or one or more of them is jammed in position then the master cylinder piston will be able to keep moving forward. As the fluid is now in a closed loop condition the pedal will drop even more, because in the fluid circuit is an accumulator which is normally kept closed by a spring. The MC piston will be free to move forward until the accumulator
is filled at which point the brakes will start to work. The fluid is only under pressure when it comes up against an opposing force. This force will occur when the accumulator is full and it’s spring compressed to its maximum. See the translated img015.pdf below.
Normally the MC piston only moves a few thousandth of an inch, because the seal only retracts the caliper piston that much. CLICK
The caliper piston only moves a few thousandth of an inch, therefore the master cylinder piston only has to move the amount of fluid required to move all the caliper pistons a few thousandths to hit the rotors. This assumes that there is no air in the brake lines, master cylinder or the ABS unit. The brake fluid is not compressible otherwise.







Here is how the brake cylinder piston returns to its original position, it is nothing fancy, the seal returns to its original shape and takes the piston with it, that is why the pins on which the callipers ride should be kept clean and greased allowing the callipers to move smoothly. Rapid rotor and shoe wear can be expected if the calliper cannot move or can only move one way, my rotors practically look as if they were just machined. CLICK