Yes, they break the rule.  Technically, they also beak the rule if they are on a floating dock without a PFD.  This is a rule that had a lot of unintended consequences.

Was the Y flag flying ashore or from the committee boat?
Also, 40.1 references "each competitor." Would a boat be considered "competing" if the racing is done? 

The question is, of course, how long after the finish the Rules can apply to a boat. At Pac Cup, this has been the subject of debate, or at least concern. We insist on good behavior all week at our host clubs, and we require boats to come directly to the inspection dock after finishing, without stopping or taking on or discharging crew or gear. We have penalized boats for breaking those requirements, but they have not gone up on appeal.

The preamble to part 4 says it applies to boats racing unless the rule states otherwise. None of rule 40 specifically states otherwise. Common sense says:
40.1 refers to competitors - if the event is over, you can't be competing. The definition of racing doesn't apply and you can't be subject to the NOR or SI's any longer.
40.2 (a) refers to while racing
40.2(b) refers to at all times while afloat that day in the context of 40.1 "competitors". Therefore 40.2(b) can't apply after the event is over.
 If other safety rules of the club apply at other times while on or in their premises under their jurisdiction, that's a different matter.
40.2(c) is also in the context of when the CLASS RULES, NOR, OR SI apply.

If you're sailing your boat within the context of a competition or an event governed by its specific rules, then you're subject to those, otherwise you're on your own and subject to your government's boating rules.

Part 4 rules apply only to boats Racing unless the rule states otherwise. 

Rules of Part 4, Section A apply only to boats RACING, unless the rule states otherwise. 
40.2.b does not specifically state otherwise. 

So the rule is equally applicable retroactively to a boat arriving in the morning before racing without PFDs on. 
Then I agree that the rule needs to be tightened up. 

To Ralf's original question. He makes no mention of a "Y" flag or where it was flown. So the answer is "It depends"

It's amazing to me how many people want to twist the simple words of a rule into what they want the rule to say.  As a wise judge once told me 'read what the words say, not what you want them to say'.

40.2(b) is really simple.  If the flag is flown or the rule is invoked in the NoR or SI then you have to wear PFDs 'while afloat that day'.  There is no ambiguity, no 'while racing', no mention of when people are competitors.  If you are afloat on that day you must be wearing a PFD or break the rule.

People do not switch on and off being competitors.  We have a definition of what a competitor is, i.e. 'a person who races or intends to race in the event.'  You become a competitor when you start 'intending to race' and, importantly, it never ends.  You are a competitor in that race forever.  50 years after the event, if it is found that you cheated, you can be penalized.

As far as the preamble to Part 4 goes, the rule very clearly states otherwise.  'That day' is clearly a different time frame than 'while racing'.

As far as possible penalties, if you break the rule you are penalized in the race nearest in time to when the rule was broken.  If it is after the end of the last race of the series, then you are penalized in the last race of the series.  See the last part of RRS 60.5(c).

Clearly, RRS 40.2(b) has situations when it is not appropriate.  It is not appropriate when boats are coming from all over an area to a central racing venue.  If it takes a boat 2 hours to motor to and from the racing venue, then this is not a good option.  If you are racing a small dinghy where everyone is coming from a single club, the boats may not launch until the D flag is displayed and are all escorted back to shore, then this may be a good option.

For events where boats are coming from all over, I generally recommend saying that RRS 40.1 applies to competitors while boats are in the racing area and are preparing to race, are racing, or have been racing.

I would say the intent is to cover the sail out to the racing area and back to the dock, assuming boats sail out of a common club for day racing (as a few of the rules imply). We cannot assume that anytime afloat meant any time in perpetuity! I know the intent in may class rules written that way is to cover from the time they leave the dock until they return to the dock from racing and it's sometimes explicitly stated that way which clears it up.  In the case of boats not returning to a host club, I would think the event, and the rule naturally end once the competitor is leaving the racing area for the day.  In the case above, the boat had (apparently) complied with the rule retuning to the club and completed her obligations under the rules as the race day is done even if the sun hasn't set.. 

Also if you want to get truly technical... Was "Y" still hoisted? Because if not the RC or protester would have a tough case enforcing it.