The clutch should freewheel and thus act like it is in neutral, but the belt shouldn't be smoking or smell like it. It's likely the primary isn't opening up completely or belt spacing is off (not certain if this is possible thought).
If you're uncertain how the cvt works, I suggest you watch a few videos that show how they open and close. This will help your understanding and perhaps help in diagnosing what is wrong.
2012 JD855D OPS Black Poly Roof, Deluxe Cargo Box, Front and Rear Protection, Power Lift, Front Hood Rack, Rear Screen (homemade), 800 Watt Inverter, 2500lb Winch installed in cargo bed, Front and Rear LED auxiliary lighting (4" square 27 watt), Front and Rear CV Guards, Koplin Side Mirrors