First, know that CX does not roll over status miles. Once you "hit" the threshold, their philosophy seems to be that any additional status miles you have are irrelevant.

However, the final result depends on a few factors. First, are you DM or GO right now?

If DM:
1.) Your status miles are "lost," as you say. This is a very common complaint about CX's system I think we describe it a bit in the faq. Your year will NOT be reset early (although some people here say you can write to CX and request that, but given your example with such a tight timeline between the flights - Sept 20 and Sept 25 - I doubt this would work). Instead, you will keep earning status miles in excess of 120k and you will simply re-up your Diamond status in early October, while those status miles over 120k go to waste (as a token gesture, they generally give you a few weeks extra if you qualify early. Aka, if you're already DM, technically you're not supposed to re-qualify until Oct 30, but I notice myself resetting somewhere between the 3rd and 9th of my qualifying month).

If GO:
1.) Your miles might not be lost (however, read the exception below). When you hit the 120k mark (by hitting 122k with your 7k flight) on September 20, you will very quickly become Gold (generally within a week or so). When this happens, your miles will be reset AND so will your membership year (probably). Those extra 2k miles over 120k are definitely going to be lost (they don't roll towards the future), but if all goes according to as it should, now that you're DM your future flights can start counting towards your next year's DM status.

Exception:
1.) In a nutshell, CX's system doesn't really make logical sense. As you probably are figuring out, it becomes a game to try to just BARELY clear the mileage threshold. It stinks, for example, to "make" DM with a flight from HKG-JFK (10k miles in J) when you had 119,500 miles. You "lost", in essence, 9,500 elite miles. This would be really relevant for the following year, especially if you were just short of DM by 9,000 miles.
2.) The other problem is the reset timing. They don't do it based on when you FLY, but rather when the miles POST. This is arbitrary. Typically ex-HKG flights on CX post the fastest (1-3 days, depending on when the weekend falls), but some outports and particularly partner airlines take much longer. So, in your example, you fly on Sept 20 AND Sept 25. If the Sept 20 miles don't POST by the time you fly on Sept 25, then your Sept 25 miles are going to be "wasted" as well, pushing you well over the 120k threshold but not rolling over to your next membership year. Does this make sense?