What happens when I diode is overpowered and pops?

Question

Does it blow OPEN or fuse CLOSED?

Answer 1

For most overcurrents through a diode, it will fail short (i.e., closed, like you have replaced the diode with a very small resistance, and there will be no more forward voltage drop and no blocking capability).  For very large overloads, however, the diode could rupture and then of course you have an open circuit.

Diodes are generally extremely robust however, so remember they have a LOT of short duration overcurrent capability relative to their steady state rating.