"Live Drive" means the clutch has two positions, first position stops the tractor transmission, second position stops the PTO. The idea is that, say you are baling and you come to a thick part in the swathe, you can stop the forward movement of the tractor to gather the swathe in without blocking the baler.
The operating rod for the clutch usually has a two position clevis allowing you to either have a two position operation or just a single one. As the hydraulics are usually driven off the PTO on the older Fordson tractors, setting the clevis to one position allows the PTO to keep turning whilst you use the clutch, giving you "Live" hydraulics. So you can use a loader without having to take the tractor out of gear and your foot off the clutch when lifting.
Using a bush hog or similar machine which has a built-in inertia can also be a problem on a standard tractor as, when you try and stop, pushing the clutch down only disconnects the engine from the gearbox. The fact that the implement keeps spinning will drive the tractor forward not allowing you to take the tractor out of gear. This can lead to some interesting situations!
In this case an over-run clutch on the PTO shaft is an essential addition. With a "Live Drive" tractor, the transmission and PTO systems are separate so this cannot happen.
Do not confuse "Live Drive" with "Independent" systems, Nuffields have "Independent PTO" operated by a separate clutch lever, later '000nd Series Fords also had it,with a hydraulically engaged clutch in the rear axle.