Your description matches what is often called "boiling the brake fluid". Brake fluid, with the exception of DOT 5, absorbs water from the air. That water becomes dispersed throughout the fluid, and when the calipers become hot enough, the water vaporizes. The water vapor is quite compressible, leading to the feel of a spongy pedal. When the calipers cool again, the water vapor returns to the liquid phase, and the pedal is once again firm.