Domination will most likely end up getting changed at some point.

Would cliff diving be considered the main problem with domination or is "lava walking" an acceptable or problematic use as well?

If "lava walking" is acceptable then perhaps the chasm terrain should be looked at instead of the spell.
Go right to the problem since any changes to the spell still leaves similar interactions with crown of corruption, the SP equipment that gives possession, and the host of knock back/slam abilities.

What if chasms were 8 LOL damage impeding 4 instead of auto death?

 

Wouldnt it buff Clear/Climb? And it would still shoebox Domination is nothing else happend to it.

 

if you had to choose (no modifications)

1. dom/cliff stays as is
2. champs can no longer be walked off a cliff. domination lasts for 3 turns, 40 nora