microcontroller input protection with Schottky clipping diodes
Your analysis is correct. The idea is that the current flows through the diode and into the power supply. What happens to it in the power supply depends on the design of that part of the circuit.

If the current is a transient pulse (from EMI or something like that) then the circuit's decoupling capacitance and the output capacitance of the power supply will easily absorb it. If it is a small constant current then it will be used by the chips in the circuit instead of drawing current from the power supply. If it is excessive, it may cause the power rail to rise and destroy the rest of the circuit as most power supplies are not bi-directional.

The key thing is to ensure that the last situation cannot happen, and this is one of the reasons you normally see a series resistor before the protection diodes. If the potential current is still too high it is better to use a disconnection FET or shunt clamp design instead.