Cutting an RL Circuit
In a real circuit there would be a spark generated as you cut the wire because the inductor tries to maintain that current. The stored energy in the inductor produces the spark in order to maintain this current as best it can. The energy in the spark will be part of the energy initially stored in the inductor and there will be EM transmissions and light and heat and, you may get a jolt through your fingers. That's where the energy goes.

Your simulator may have default values for leakage components such as stray capacitance and this will show up in your transient analysis as an initial high peak of voltage and a rapidly decaying sine-wave probably finishing in less than a fraction of a micro second.