Is this supposed to happen?

I had Ackleberry Highway melded heading out from the north gate of Magnagora, then cut south along the Toranada River, through the Inner Sea, Balach Swamp, and Sea of Despair, before finally ending by going through the western entrance of Magnagora.

A nice big horseshoe, that should not have been breakable, save by tromping through Magnagora. There's no indications anywhere of my Demesne having been broken, such as forest or puddles all over the place.

It's like it just up and decided to quit on its own. Is it supposed to do that eventually, or is it a bug?

They go away over time but you might have left a chink in the loop somewhere and somebody was able to erase it. If its gone even in Mag then odds are somebody in your guild erased it from inside the city, nobody would auto attack a geo playing with a dem. Or some brave soul from celest or seren actually got into mag and manged to snip it at the source.

As I said, no forest or puddles anywhere to indicate it was killed....and the chink had survived a week or so thus far.

Oh well, maybe it's supposed to go away eventually. A pain in the ass, I had been given the impression they were rather permanent, unless destroyed.

Yar...now I'll have to plot.

Don't artificial demesne's disappear after a year? Or is that just if they're unmelded?

Be happy, in beta they went away everytime you logged off or died.

Demesnes are buggy. I had this happen too. Fortunately I was just testing some things and it was just one room large but it was quite irritating when it just disappeared. I had it up for some minutes only. Munsia had this problem too I think in Southgard. You see that you are not alone with this, quite annoying.
Oh, and your demesne was indeed just breakable by going through Magnagora. Don't think that we didn't try.

They are intended to disappear over time.

At least give a warning, or slowly shrink in towards the center?

I do like that. I love that they disappear (is that new?) but a message of some kind to the owner would be good, perhaps even having it shrink and an exponential rate as someone suggested.

Not really. I use to have a demesne on Spectre Island and every time I came back I had to do some repairs to it. Basically it seems a few rooms unmeld every month or so. Gets annoying at an intersection though.