In addition to what Usama said, I would add that what you are observing is the difference between a simulator and what would happen in the real world.
In your circuit, you show a diode connected directly across the output of a signal generator. The signal generator is apparently assumed to have zero output impedance, so it appears not to be bothered by being short-circuited by the diode for the positive half-cycles. In the real world, the signal generator has a certain output impedance, and the diode has a certain maximum forward current rating before it burns up. These two things fight against each other. The simulation shows the signal generator winning. In the real world, the diode might win, and the scope waveform might look clipped just the way you expected it. Or else maybe the signal generator would win and burn out the diode. In any case, you won't get the real world to behave exactly as that simulation shows.