At the end of the Wing Ceremony, Zelda instructs you to jump off the Goddess Statue and land in the middle of the design in the courtyard, opening your newly acquired Sailcloth at the last second by pressing B. If you were to not press B, what would happen? Would it open automatically, or perhaps something else?
If you don't open the Sailcloth after the Wing Ceremony, Link goes splat and you get to try again. Repeat until successful.
Falling from a significant height without the Sailcloth anywhere else in the game will damage you, but in this particular instance you won't get hurt.
Also note that the game will open the Sailcloth for you when you're dropping to the surface from the sky.
In the Wing Ceremony if you do not open the Sailcloth, then Link will fall onto the ground without taking any damage, and you will have to try again. If you do not open it when falling off your Loftwing over Skyloft, or when you are falling to the surface, it will open automatically if you get close enough.