It just stops. 29 minutes is nominal for more compressed AVCHD (full HD) format. It has to do with the file size limits of two or four gigabytes, nothing else really. Also, it's my understanding IF they allowed it to run like a camcorder (which is several large files seamlessly linked during playback), it would be taxed differently, making the whole thing more expensive since it would be classified as a camcorder.
Besides that, the image sensors on these cameras are huge compared to most video cameras. They build up more heat when shooting video, and enough video may eventually force it into a safety shutdown for heat. I recall hearing an episode of House was filmed with an army of Canon 5D somethings for this reason, after an hour the camera had to be set aside to cool down, so they used the next one. Not the exact same thing, but pretty much the same thing that would happen on these smaller cameras.
In the end it's the biggest 'fib' in the camera industry, no matter how good videos from these cameras look, these are not camcorders and they don't act like camcorders.