What is the purpose of closing all the valves? Does the engine not disengage from the transmission in pure EV mode? I'd have thought even with the compression acting like a spring that the friction losses of spinning an engine with all the valves closed would still be huge but I don't really know.
In the Honda Civic Hybrid, the traction motor/generator is built into the flywheel of the IC engine. So, Honda cheaped-out of the drivetrain. (Probably to not infringe on the Toyota Prius drivetrain.)
The motor is permanently connected to the IC engine, if one is spinning, the other is, too. With all valves closed, the friction in the engine is amazingly small.
If you want to check this out, you need an OLD car, pre-computerized drivetrain. Put the transmission in LOW, and accelerate to, maybe 30 MPH. Turn the ignition off and simultaneously floor the accelerator. Let the car coast for a few seconds, then take your foot off the accelerator. The difference is the pumping loss of the engine throttle. You will be amazed at how well the car coasts with the throttle wide open, and how quickly the engine brakes the car when you close the throttle. (Note: Do not turn the ignition back on while the car is moving, or you will likely blow the muffler up!)
So, it seems that they DID know what they were doing, and got quite low friction with all the mechanical works spinning.
The Honda Civic Hybrid does not really have a "pure EV mode", you cannot start from a standstill in pure EV, but you can run for very short distances or down a slight hill as a pure EV, or just coast with NO energy input, when plain inertia and potential energy are sufficient.
Jon