I recently asked this question asking if the temperature was handled by hardware or software and someone told me that it was handled by raspberry pi firmware (hardware). Appearently performance is throttled back when temperature is too high, but it got me thinking: what if it doesn't help? What if temperature continues getting higher? Does Raspberry Pi power itself off or it just stays on?
The most likely outcome is that you have a hard crash or lock due to bit errors (The likelihood of a register, gate, or sram node flipping of its own accord is proportional to the junction temperature) .
As far as I can tell, There is no default mechanism for thermal shutdown enabled on the raspberry pi kernel beyond throttling.
Since RPI lacks hardware shutdown, the effectiveness of any shutdown mechanism in preserving the CPU is limited.
Throttling is a mitigating strategy to decrease the power consumption of the CPU and, as a consequence, its temperature. It is an attempt to keep the CPU within its safe operating region.
If, for example, the ambient temperature is very hot, no amount of throttling would guarantee safe operation. However, IC's and PCB's can safely "ride out" very high temperatures if they are turned off.
Products designed to operate at an elevated ambient temperature use various strategies to maintain the safe operation including underclocking and protective shutdown.
At some point, you need to just turn yourself off, and the RPI cannot do this, if soft standby/idle mode provide only a small additional safety margin (device is still on), you may as well run until you crash...