The engine "shut down" actually refers to fuel consumption.
As I understand it, the valves are closed and the fuel injectors turned off but because the wheels are still connected through the transmission to the ICE and the electric motor, they both keep spinning. No fuel is being used, but RPM is still indicated. A neat idea really. The ICE is virtually "coasting", without any drag...or very little anyway.
It's necessary to keep the ICE spinning because when you put your foot back on the accelarator, there will be a smooth transition back to power - either ICE or electric - depending on road speed.
It had me tossed at first too. I asked the same questions.
Hope this helps...or maybe someone else could explain it more eloquently than me.
