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I'm pretty new to electronics, and so I've been modelling my circuits in a Falstad's circuit simulator.

I noticed something which I did not expect, and am curious - is this effect real, or is this a bug in circuit simulator?

I've reduced my circuit to the smallest circuit that shows the problem - shown here

My understanding of this circuit is that the diode should block the current from flowing from the right (12v) side to the left side, so the circuit becomes a 5v power source, connected to a resistor - should be at 5v.

Note: I want to understand what's happening, more than I want a solution. I know I can put in a smaller resistor, to make the problem less.

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Look at the current in the diode. It's a measly 170nA. Take a look at the diode curve below. Even when reverse biased some current will leak through. This is what you are seeing. The problem is the 10Meg can't source much current so the leakage vs the current in the resistor balance to 6.7V on the floating node. Change your resistor to 10k and you see what you would expect since the resistor can now source much more current and drown out the leakage of the diode to keep the floating node biased to 5V. Change it to 100 GigaOhm and then the resistor can't source any current and the diode leakage will bias the floating node to 12V.

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