EFI cars enter decel cut-off when the conditions are right: throttle closed, rpm high and in some cases speed above a certain limit. NO FUEL IS delivered. The motor is being turned by the rear wheels and IS acting as a brake. When the conditions change the state changes. Thus when the speed drops (engine or in some cases vehicle) fuel is given back and as pointed out with an engine spinning at 1200rpms what use is a starter (that spins at 300rpms).
When I was young and lived where there were hills (Seattle), I was told that it was either illegal or illogical to coast down hill. Bad's comment about the trans got me thinking and for awhile he had me agreeing that the trans would suffer because the pressure would be reduced at low front pump speeds. I do know that trans system pressure is not stable often till 2000rpm. But then I realized that since the thing would be in neutral no force would be transmitted and idle pressures are definitely adequate for rotational lubrication.
As to the original argument, I agree with Bill, if you were coasting down Vail pass, properly, you could use no fuel for miles. If instead you coasted the engine would use idle fuel consumption for that distance and might actually be significant.
As to the transmission part, I am still wondering about the wear. I can gaurantee that pulling the car in and out of gear at speed is one of the worse things possible and should not regularly be done. Many MB trans will reengage at low gear and can over rev the motor before they shift. Doesn't usually happen but when ever I pull a trans to neutral (for diagnostic purposes) I always slow down before pulling it back to drive.
Bosch Master, ASE Master, L1
33 years MB technician