I think that you mixed up two terms here.

1. Limitation on Elective Deferrals ( $17,000 for 2012):

this is for defered tax purpose.

2. Max annual contributions (the lesser of 100% of your compensation or $50,000 for 2012).

At least for our company, it would keep matching your contribution even after the $17,000 limitation, but would stop matching after you reach your max annual contribution.

Link for the two terms defined by IRS:

http://www.irs.gov/retirement/participant/article/0,,id=151786,00.html