@firewired
What the manual calls "motor braking" is indeed regeneration or recapture of energy. In an ICE vehicle, motor braking produces heat. In the FFE, some energy is indeed lost as heat, but a large part is recaptured by the generator. It would make no sense for an EV to have a motor braking function and just lose that energy to heat. With feet off pedals, the electric motor's generator function provides resistance to front axle rotation, slowing the vehicle. Low gives "maximum" resistance, Drive gives some degree less. When you lightly step on the brake, the car's computers increase generator resistance to further slow the car down. Only when you step on the brakes past a threshold point do the disc brake pads push against the rotors.
Yes, if I designed the vehicle I might have it show the regen spinning wheel whenever the vehicle is converting forward movement energy into electrical energy, but it appears that those who actually designed the vehicle chose to only show that graphic with brake-pedal regen. I think the idea is coaching. No one needs coaching when they are coasting, but the graphic when braking reminds one not to mash on the pedal and instead ease down on it and try for 100% (as long as the schmoe in front of you isn't slamming on his own brake).
I have no experience with the Eco mode in the Leaf. I would expect an Eco mode to limit acceleration, top speed, that sort of thing- that's where you're going to save energy.
The L setting most definitely increases coasting regen, and this aggressive coasting regen most definitely lowers miles per charge. In that "maximum" setting, more heat is produced and so a larger portion of available energy is lost, therefore it results in less miles per charge. When you should be trying to coast without using the battery as far as possible and slowing down as gradually as possible, a setting that does the opposite won't be as energy-efficient.