Please this note from our user manual regarding the Diode Turn-On Threshold solver setting:
Note The Diode Turn-On Threshold is not equivalent to the voltage drop across a device when it is conducting. The turn-on threshold only delays the instant when a device turns on. The voltage drop across a device is solely determined by the forward voltage and/or on-resistance specified in the device parameters.
This is a global setting for the model, and is not related to the Vf value of any given diode in your model.
By the way, are you intentionally including the variable resistor block in your model in this case? This will create a (likely solvable) algebraic loop in your model and therefore we don't recommend this approach unless such effect is really something of interest for your particular study. Further, if this is at all related to another question you asked about steady-state convergence, I do assume that such loop solving at each simulation step certainly would slow things down.