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You'll see it does that at stop lights when you coast to a stop. It's one of the things I used to like about my G1 Insight too.
The ICE will run for a couple of seconds and then shut off as you're slowing, and as you take off you'll be on EV power until the ICE kicks back in, so as you're getting up to speed you aren't burning gas
When I'm coming up to a light I know will cause me to stop I coast down in "D" most of the way then switch back and forth between "L" and "D" to get the longest coasting distance and most regen possible. If I time it well I never hit the brakes or come to a full stop
Before climbing a hill I slowly gain speed and then bleed it off as I come up the front side. As I crest the hill I throw it in "N", and down the back side of the hill I'm in neutral picking up speed until the hill bottoms out.
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