I've seen a couple of those 70s Schwinns with freewheeling bottom brackets-- very odd! I don't remember exactly how it worked, but some Google magic turned up this mention of it:
http://fredhaj.tripod.com/suburbanpage.html
Apparently it's called "The Shimano Front Freewheeling System (FFS)"
"The advantage to this arrangement is that it permits shifting while coasting. Another interesting feature is the Positron deraillier. With the Positron system, the indexing detents are built into the deraillier rather than in the shift levers."
Interesting-- the rear wheel is a sort of multi-gear fixed hub?
from an archived bikeforums post...
Originally Posted by jacksbike
The rear 5 speed freewheel was screwed onto the rear hub and did not freewheel. It move backward or forwards in the same direction as the rear wheel. Now the crankset, sometimes 1 piece and sometimes 3 piece cottered, had the freewheel built into its bottom bracket. You would push down on the pedals, and if you stopped, the 2 front sprockets continued freewheeling forward, while also pulling the rear wheel along with it. It was a great bulletproof system for beginner cyclists. Negatives-added a lot of weight to the bike, needed a special rear freewheel (that did not freewheel) special crank arms, sprockets , bottom bracket, and special (again) Shimano tool to remove the bottom bracket freehub set up. Anyway, don't know if anyone makes a single speed version of this. Perhaps a BMX knowledgabel person could answer.