Whether a starter is used to turn an engine or it is already turning, it is still a "restart".
While in NEUTRAL, the engine does not turn the driveshaft, nor does the driveshaft turn the engine. If fuel is cut off, the engine will stall. Thus if your friend puts his car in NEUTRAL while going down a hill, the engine will maintain idle RPM. He may save a few cc's of fuel per tank.
There is a decel cutoff while in gear, but I have not determined how long it is yet.
Regardless, I do not believe it is good for the transmission.
'05 E320 CDI - 86,000 miles
'86 300SDL - 360,000 miles
'85 300SD - 150,000 miles (sold)
'89 190D - 120,000 miles (sold)
'85 300SD - 317,000 miles (sold)
'98 ML320 - 270,000 miles (sold)
'75 300D - 170,000 miles (sold)
'83 Harley Davidson FLTC (Broken again) :-(
'61 Plymouth Valiant - 60k mikes
2004 Papillon (Oliver)
2005 Tzitzu (Griffon)
2009 Welsh Corgi (Buba)