Half inside such that it allows the flow of goods (the UK is a net importer) but not services (which we net export). This would be untenable, worse than a no-deal situation. And the basis of this speculation is that the EU is holding all the cards. I'm really not convinced this is true.
The article reads a little bit like a remain fantasy - Brexit will be a disaster and then people must come around to my way of thinking! The problem with that analysis is that in your way of thinking it was likely unimaginable that the Brexit vote would go through in the first place. And then we heard that no PM would ever actually action it, and then that no Parliament would allow it. None of which has really panned out.
--edit-- I'd love to reply to more of the comments below, but I appear to be rate-limited. Never mind then...