No--that's not what happens--what goes on is that the powdered coal is injected into a closed vessel along with an "oxidant" of pure oxygen, plus some live steam. This turns all the carbon in the coal into carbon monoxide, and basically "extracts" the oxygen atom from the water, leaving hydrogen. The final result is a mixture of carbon monoxide (CO) and hydrogen, which can be easily separated from one another by diverse methods. Depending on the efficiency of the separation process, it is likely that there will be some tiny amount of hydrogen in the carbon monoxide stream, and some tiny amount of carbon monoxide in the hydrogen stream (in both cases probably in the parts-per-million range). Certainly not enough to cause any problems with "exposure to people, but PERHAPS enough to poison catalysts on "some" types of fuel cells. If that is the case, some additional cleanup process will be used to get rid of the last vestiges of CO.
By the way, is there any use of CO? It's toxic to human.