When the car is coasting in this mode, the RPM doesn't change immediately. Sure, the car is slowing down at a very slow rate. The active cylinder isn't really "driving" the rpms, the inertia of the car going forward with the transmission engaged is driving the rpms.

On the other 3 cylinders, the valves are closed, causing very little drag to occur from them. This is done so that maximum transfer can go to the regeneration of the batteries.

However, by pressing the gas pedal slightly, you can "tell" the car not to go into regeneration mode, because it thinks you want to accelerate. Your foot isn't pressing the gas pedal enough to actually accelerate, however, so what you get is pretty much coasting -- except the transmission is still engaged, and the engine is only running on one cylinder, giving you the best of both worlds. You get coasting with very little engine dragging, and the engine running only on one cylinder using very little gas because the inertia of the car is helping to keep the engine running by way of the transmission.

It's not obvious when running at highway speeds, but at lower speeds -- 40 mph and under -- where I can really note the difference. Since our FCD can only go to 120 mpgs, the slower speeds will show the difference. Shifting to neutral while only going 25 mph might get you 90 mpg, but if you stay in 4th gear and let off the gas without getting regen, you'll get 120 for sure.