What molecular characteristic becomes important at 100 km, causing traditional aerodynamic modeling to break down?

The mean free path of air molecules becomes significant

As a vehicle ascends past the Kármán line, the atmosphere becomes so rarefied that the behavior of individual air molecules changes drastically. At sea level, the atmosphere is treated as a continuous fluid medium where molecules collide frequently. At 100 kilometers, however, the distance an average molecule travels before colliding with another—known as the mean free path—becomes large enough relative to the size of the vehicle or the distances involved in airflow calculations. When this path becomes significant, the continuous fluid model of aerodynamics is no longer valid; the flight regime shifts to one dominated by individual molecular interactions, which is a key scientific differentiator between the lower atmosphere and the vacuum of space.