Inattention blindness. There was even a local researcher working on quantifying the phenomena.
http://www.timesunion.com/default/ar...al-1416065.php
"We have used the term 'illusion of attention' to denote the common but mistaken belief that people pay attention to, and notice, more of their visual world than they actually do," the paper based on the experiment states.
So handsfree creates another illusion of attention which can have deadly consequences for those who ignore the signs.