The driveshaft is still turning the pinion which is turning the ring gear/spool. The axle splines strip out so they slow down or stop as the car coasts, but the spool will keep going if you still have your foot in it.
As soon as the splines stripped, the engine/trans/driveshaft/spool will "freewheel" b/c there's no load anymore. That's when the trans damage can occur.

He said when it broke the car pushed like it was in neutral all the time and wouldn't move under it's own power. It might as well have dropped the driveshaft, but it stripped the axle splines. Different location of the breakage, but same result.