Clutch cable replaced.

[Vmass]

1980 GS1000: I replaced the clutch cable and adlusted it to the point were it feels right.

My question is (bike is not running) after putting the bike in gear, holding the clutch cable in, should the rear wheel spin freely or is a running engine needed to disengage?

Not sure if I worded that right....

[koolaid_kid]

There is always some drag on the clutch plates, so no, neither will work.

[Vmass]

There is always some drag on the clutch plates, so no, neither will work.

So my description is considered normal?

[koolaid_kid]

Yup. If you can call anything about a GS "normal".
IIRC, it is just how a wet clutch works.