The highway code is not the law but it does indicate items which are law by the words 'must' or 'must not' in bold. For example in the next section to the one above it states :
You MUST NOT leave a parked vehicle unattended with the engine running or leave a vehicle engine running unnecessarily while that vehicle is stationary on a public road.
Its unlikely a policeman would stop you for coasting, engine off or on - they probably wouldn't know. If your driving is erratic then they would take an interest though. Mind you with so many cameras, when was the last time you saw a traffic policeman in the UK ?
If you were involved in an accident then they would take into account the full circumstances, for example they would probably know from the key position whether the engine was running or not for example. This would only be the case for a serious accident. For a small bump they would probably not be involved. I suppose its up to you to decide what is/isn't safe depending on the circumstances at the time.
For coasting I have tried engine off but decided against it. In gear vs out of gear depends on the downward slope - if its steeper I use in gear as no fuel is being used to turn the engine. On a less steep incline I may use out of gear as I can coast much further. On my homeward journey at the start of my coast period the average MPG is usually registering mid 40s and by the end it can be up to 59. Unfortunately Edinburgh conspires against me after that and its down below 50 by the time I get home.