"Brake fade” generally refers to any loss of braking caused by overheating. In fact, there are three very distinct forms of “brake fade”, and it is useful to distinguish between them, as their symptoms and solutions are entirely different.
Pad Fade is caused by the temperature of the brakes exceeding the maximum temperature limit of the brake pad friction material. When the maximum temperature limit is reached (and even before, as it is approached), brake pads can expel gases when heated, gasses that act as a lubricant between pad and rotor. When pad fade occurs, the brakes will feel “normal” (high and firm) but there will be very little stopping power.
When the temperature of the caliper exceeds the boiling point of the brake fluid, tiny bubbles are formed in the brake fluid. As a result, the pedal goes soft and perhaps even to the floor as the fluid is no longer incompressible. Once this has happened, the fluid must be replaced. Over time brake fluid can absorb water vapor and the more water vapor in the fluid, the greater its susceptibility to fluid boil. Solutions to fluid boil include: flush and fill with new brake fluid, use a brake fluid with a higher boiling point, improve cooling of the caliper.