Algodoo

Sorry, but that's bad math, or rather bad transfer.
You still have all the same amount of energy, just spread around.

To start, going into the rotor is just a transfer of energy, it is still kinetic energy it is just in a different direction. You still get the same affect as a shock absorber, slowing the application of the force and storing it in the spring, or in this case storing it in the wheel.
Additionally, if you used a brake on the rotor you are simply converting all the motion into heat via friction.

Doesnt break any laws, and is also by no means revolutionary (no pun intended)