The water level in the Biofalls would drop only if the pump is not running or you do not have a backflow preventer. If the pump is running, it will supply ample water to keep the biofalls full and the waterfall working. The flex would have to become completely detached from the Bulkhead fitting for the water level to drop.
I mentioned this possibililty because I ran into the exact same problem a few years ago. Customer's pond started showing substantial water loss (Pond was almost one year old at the time). I checked all of the usual suspects: resealed around Skimmer weir, resealed around Biofalls faceplate and weir. Still had substantial water loss. Very frustrated by this point. Left with only one possibility. Dug out behind biofalls unit and sure enough there it was..the leak. The glue had not formed an adequate bond between the Flex and bulkhead fitting and had over time the flex had gradually backed almost completely out of the bulkhead fitting. No wet spot was detected because the leak was underground. One other factor that attributed to this leak forming was that the Flex was not inserted into the fitting WITHOUT lateral pressure. Flex will bend, but has a tendency to return to its former state. In other words, if you manual bend Flex to achieve insertion into a fitting, once the manual pressure is released the Flex will exert pressure in the opposite direction. Depending on the amount of force, the integrity of the Bulkhead fitting itself could be compromised. Long, wide sweeps are advised when using Flex, if conditions do not allow this then use of 60o or 90o elbows is indicated to avoid any excess lateral pressure.
rlitman- What you mention is very true and often overlooked on older installs. I presently have to deal with this on my own personal Pond. With 100' of stream with root encroachment plus a planted constructed wetland plus the usual marginal plants, it is normal this time of year for me to lose 100-150 gallons per day to evap and trans-evap. I tolerate it because it provides an exceptional amount of phyto-filtration and bio-conversion. I never have a water quality problem even with my Pond being overstocked. It's a trade-off.....trim roots occasionally or clean additional filters.