I had Raleighs with the SA 3spd. Constantly fiddling with that stupid adjustment.
Shifting can be done when coasting with pedals stopped, but when coasting with pedals turning forward lightly
is even better. Shifting to a higher gear is always ok when everything is stopped. Shifting lower is ok when stopped if and only if it will go freely; just don't try to force it.
There are several easy ways to do that cable adjustment, all of which yield the same result.
1. With the shifter in the lowest "gear," adjust it so the shift chain can still be pulled slightly farther out of the hub without undue force.
2. With the shifter in the highest "gear," adjust it so there is only slight slack in the shift cable.
3. Placing the shifter about midway between the highest and middle "gears," should yield a neutral position (pedals turn forward freely with wheel stationary).
4. Notch on shift rod should align with end of the axle in the middle "gear." (May not work if parts have been replaced...)