This makes no sense at all. If the chain broke, there are now two ends to the chain. Pulling the clutch in does not release the rear sprocket from the rear wheel, so the wheel will still be locked up. And even if it did magically release the rear wheel, the chain cannot stay on the now turning sprocket, and since it is broken, it must eventually come off the rear sprocket. I have zero experience with Harleys, but, what about the primary? Is it still a chain driven component? Could he possibly be referring to that? But even if he was, once the chain is off it is off. No matter what chain it is, if you continue to rotate one end, the chain will come off, or jam solid and stop that piece from rotating.
my guess (considering no photos):
chain snaps, presumably on the top loop. release of tension causes the free end at the front to fly forwards, jamming the front sprocket to the transmission output, thus locking it. i can kind of visualize a rear wheel spinning at the appropriate rpm for the bike to travel at 110 kph, with the momentum of the bike providing torque at the rear wheel. At the same time, the engine is still connected to the transmission, which is creating torque on the front sprocket.
once the clutch is pulled, the torque on the front sprocket is released, allowing it to rotate freely without any external force (ie, the engine). with this, the chain is loosened enough from the rear wheel that it falls off that end, but is still jammed somewhere in the casing around the front sprocket.
**** i dunno man, but the first half of your post seems to me like you're saying the OP is making this s*** up.
to the OP, I thought most sportsters had a belt final drive?
glad you're okay.