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That's right. In gear with clutch lever pulled in, it's supposed to spin freely with no drag like in neutral. Your clutch-plates are not disengaging when you pull clutch lever.
Spin adjuster on clutch-lever to tighten cable. Unscrew larger lock-ring. Then unscrew inner adjuster away from lever so more threads are exposed. Try about 2mm, does clutch disengage when lever is squeezed? Try 4mm, does it disengage when lever squeezed? When finished adjusting, tighten down lock-ring.
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