The car automatically cuts fuel when you leave it in gear and coast, even with it "on". Your momentum turns the engine even though no fuel is being injected, and the accessories such as the power steering and brake booster keep power. This is called Deceleration Fuel Cut Off (DFCO). Some of your momentum is lost to spin the engine and accessories.
When you put the car in neutral (or better yet just put in the clutch) and turn the engine off, that is Engine Off Coast (EOC), and is the most efficient way to coast unless you actually need to slow down, in which case DFCO is the best method.
When you EOC, you don't need to have the key in the off position the whole time, and that can be a bit dangerous because if you turn it off to far, the steering wheel could lock when you go to turn. Simply turn it off long enough to kill the engine, then click it back to the on position, and when you're ready for the engine to come back on, let the clutch out while in 5th gear to bump-start the engine. No fuel will be injected until you bump the engine back to life.
The Outback is a bit of a pig and extremely difficult to mod for much better fuel economy.
There's a few older threads on here where members failed to achieve the MPG goals they were aiming for. Zerohour documents his efforts here:
https://ecomodder.com/forum/showthre...-5l-14034.html
Another member, Brucey, had an Outback of your vintage and has a few threads on various mods he tested. Do a search for threads by him if you're interested.