Originally Posted by Ryan @ RJM

Good evening, this is a classic case of the master cylinder not fully returning and causing fluid to be trapped on the high pressure side of the master cylinder. When the car sits overnight the fluid in the line contracts causing the squishy pedal feel until the car warms up causing the fluid to expand again and feel normal. There is a tiny fluid port inside the MC that allows fluid to flow between the reservoir and the high side of the system which is only open when the master cylinder is 100% up and closes upon the slightest amount of MC travel down the piston bore. The port staying closed causes the feel you're describing.

Two main causes for this are:
1) the upper cruise control switch adjusted too tight holding the pedal down slightly. This keeps the port closed all the time leading to changing pedal feel from cold to hot.
2.) if the two side tension bolts that take up side-side play in the pedal are adjusted too tight the pivot bearings will have extra drag and the pedal may not fully return to the top under it's own power 100% of the time. This can cause the feeling you describe to happen either randomly or all the time depending on how tight the bearings are.

To check for this is easy. Go under the dash and press the pedal down by hand then release the pedal very very slowly. Then note where it stops on its own. Did it go all the way to the top and hit the upper switch firmly? If so likely the switch is set too tight. If it stopped short of pressing the switch and you can pull it up more by hand after it stopped then the bearings are too tight. In this case loosen the two side tension bolts evenly a 1/4 turn each and retest. Do this until the pedal comes fully up when releasing slowly.

That should take care of it.

Also TBatt made a good point about setting the AFP to zero for doing a full bleed. This is needed to push the highest volume of fluid thru the system and to ensure the MC goes full stroke to get all the air out of it. There is one exception here though - you only need to do this if you have air in the system you need to get out. Such as when you've had the system opened up to replace something. If just doing a simple clutch fluid flush for maintenance with one person pumping the pedal and another opening/closing the bleed screw then you don't need to adjust AFP first since there shouldn't be any trapped air you need out.
That note Is mostly just for guys or shops who installed the pedal along with a new clutch, CSC, clutch line or MC at the same time which is quite common.