Suppose I fall in lava lake, I have elytra equipped. I also have rockets for the boost if I can take off. But can elytra be activated in lava ?
Yes; tapping spacebar when floating in lava with an elytra equipped will allow you to start flying, and then rockets can be used to take off. Here's a gif of me doing so:
Additionally, here is the code that is run when a
START_FALL_FLYING packet is sent:
You can see that it makes sure the player isn't on ground, isn't in water, isn't already flying, and has a negative vertical velocity, but it does not check to make sure that the player isn't in lava.