If you make a habit of coasting in neutral you are wasting gas. The injectors are closed when you are in gear and coasting above idle. The cars forward energy combined with the engaged gears keep the engine turning, thus fuel is not required to keep the engine running. When you are sitting at a stop, or coasting at idle, the engine must be supplied with fuel to remain running.
On top of that, making a habit of coasting in neutral is dangerous. The amount of control you have over a car while it's moving in neutral is slim.
If you keep the clutch depressed constantly you could prematurely wear out your throwout bearing. There is no good reason to keep a manual car in gear and the clutch depressed every time you are sitting at a red light - besides, even *IF* this were a *STATE* law, it would never be enforceable.
Bogging is very stressful on an engine. It should be avoided like the HIV.
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