If Link faces upward and uses the candle when a solid combo is right above him, the flame rockets upward until it reaches a walkable area or the top of the screen.
Though, what exactly should it do? When using the candle facing sideways, the flame goes the usual distance, wall or no wall. When facing downward, the flame stays put.
It's weird that fire is one of the few weapons affected by gravity. It could pretty easily be changed to work like it does on top-down screens, but I wonder why it was made this way in the first place? Maybe _L_ can tell us when he stops by.
The primary reason was that I thought it made for interesting motion and behaviour, especially when used by projectile shooters set high in the screen, that could spit gouts of flame down upon Link. Secondarily, I thought that the movement of the flame in the original Zelda - its slowing down to a stop as it is sent from the candle - indicated a certain adherence to physics that the other projectiles (rocks, magic etc.) did not have, so it made intuitive sense that it would obey gravity as well as, apparantly, friction.
P.S: Fixed.
Fix confirmed in RC2.