What happens when the roots start forming on the cutting above the soil in the cup??

Those roots will eventually dry up and die. If they are close to the soil line and you have room in the cup I'd gently add some more potting mix to cover them.

I get that a lot when I have cups in a plastic tote for humidity. In a high humidity environment the cuttings will root above the soil line very frequently.

They will "air prune" themselves. The roots will dry out above ground.

Doug

Make sure its not upside down ; -)

Thank you. I never knew there was a top and bottom. How can you tell the difference? Thanks everyone for the input!!

If you're confused as to which side is up, start the cutting sideways, or flat in the rooting media, mostly covered. 
I find cuttings sometimes can't make roots below the rooting medium for some reason so will start them where ever they can. It's their way of telling you "Help!".
I bought some cuttings on eBay and I'm sure the person who sent them dipped the whole length of cuttings in a rooting solution, because roots came out everywhere, but there weren't any sprouts. 

Make sure when you look at it (holding it vertically) that you are seeing a smiley face (where the leaf scar is, by a node) and not a frownie face lol, thats how I remember it :) Though lying it horizontally in the soil works well too (like Mara suggested above)