How do protection diodes work?
The voltage through an a diode is not always 0.7V. It's an approximation that we use that is "good enough" for most applications. The voltage across a diode is proportional to the the current through the diode. 

If you look at a typical diode I-V curve such as the image below, as the current If increases, Vd doesn't change a whole lot. The knee of the curve, the point at which the diode begins to conduct is ~ 0.7. 

In you're circuit, you are right- The load voltage would be ~ 11.3V. It's an approximation because Vd is dependent on the current through it. 

If your circuit draws 1A, then the diode voltage maybe 0.9V (it depends on the diode) and the voltage at the load would be 11.1V instead of 11.3V.