The geared hub motor has a clutch inside which engages the motor when motorized. The geared hub motor also has free wheels for when the motor is not providing a torque. The brushless geared hub motor does not have any drag when used as a normal bike; it feels just like 2 free ball bearing.
The mid drive motor (crank motor) provides a boost to the crank torque. The power is transmitted by the chain to the rear freewheel. The bike transmission gear ratio affects the torque and speed. Also the freewheel sprocket lets the wheel freely roll with no drag.