I just took a round cake out of the oven. Standard cake mix with sour cream and vanilla pudding added.

The cake layers both have 7.25 inch tops and 7.75 bottoms.

When I took them out of the oven, they looked fine. I turned around in like 5 minutes and the tops had shrunk away from sides of the pan. I'm just using the top edge of the cake as a guide and trimming the extra 0.5 inch off all around the cake.

What is this called? Did it fall? What caused this?

All cakes shrink away from the sides of the pan at the end of their baking time, its one way to know if the cake is done. However, overbaking a cake can cause the problems you are having, even if it is only by 5-10 minutes. There might be other reasons, but this is the first one that comes to mind for me.
If however by "fall" you also mean the centre has sunk, that is another thing completely...

I've been baking for 35 years and never seen a cake do like this. I don't know what it's called. It's not normal. I've never had a cake fall before but I don't think that is what it is.

Oh well, a baking mystery.