HEC-RAS puts the flow at the lowest elevation. If you have somewhere lower than your channel you need to use ineffective flow areas if water will not flow there at all (i.e. enclosed pond), or a levee if water will only flow there after spilling out of the channel.
You seem to have an interesting condition in that your water cascades down an embankment and is actually lost from your system if it overtops the channel. Is this a diversion ditch at the top of an embankment and you're calculating the 100-year flow in the ditch to make sure it doesn't overtop? If that's the case, I wouldn't even bother including the retaining wall in the model and just stopping the x-section at the top of the retaining wall. HEC-RAS will throw an error message if your flow goes higher than the limit of the x-section.