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The ethereal's price of failure rule stipulates that if he dies "every unit of Tau on the tabletop... must take a Morale check at the start of their next turn if they are not in close combat or falling back"

In 4th edition to the best of my knowledge units in vehicles were considered to not be on the tabletop, if not it was an assumption I played with regardless. Now some rulings suggest that any model in a transport is on the tabletop, so regardless of how it used to be, this certainly is an issue now.

Maybe I'm missing something simple, is there a ruling on how falling back when embarked should be treated? Also how does the phrase "at the start of their next turn" interact with the movement phase, is it before the movement phase or during? If it were before that would mean Tau units would potentially make a second fall back move immediately following the first, also that they could not Disembark upon failing the initial test.

I would say they either don't take a morale test because they're not physically on the tabletop, or they do take a morale test but have no specified way of falling back. I would be more inclined to go with the former just for simplicity's sake.

'At the start of their next turn' is at the start of the movement phase.