muscle loss
You body will lose muscle not matter what if you are not using it. There is a simple reason why, muscle requires a lot of energy to sustain, so they body in its infinite wisdom slowly degrades muscle if your not using it, cause it assumes you don't need it. This happens if your fasting or not.
Also in switching to ketosis, yes, you lose a small amount of muscle right away. But after that, it's all about the fat. Your body is smarter than to burn muscle instead of fat. Fat is worth more energy per cubic
inch than muscle. Muscle for the most part is the last resort when it comes to catabolism. Your body, again in it's infinite wisdom keeps muscle because from an evolutionary standpoint, why would you get rid of muscle if you need it to get more food? If you eliminated muscle first then fat, you wouldn't have the muscle to move all that fat you still got around to aquire more food!
Also! The reason why exercising and gaining muscle "eats up" fat is a little complicated, but also simple. As I said, muscle requires a lot of energy to sustain, in everyday life your everyday food gives your muscle the energy it needs. More muscle, more calories you body burns ALL DAY. Ususally if your working out (if your doing this for weight loss) your diet wont change, or will get better. So now your consuming 2000 calories a day but your body wants 2500 or more to keep it at a level body weight. So obviously your body has to find those 500 calories some place else! It takes them from fat.
Okay so if your not working out, and you are fasting, how does your body sustain all that muscle? Obviously you need your 2000 calories from some place, it takes it from fat. But as I said before, if your not using your muscle your body doesn't want to waste energy so it kills off some, lowering your caloric intake to 1900-1800-1700 and so on as time goes on. It's not the fasting that is reducing muscle, it is everyday catabolism.
Okay so, I know that my thoughts are all over the place, so here is the gist, muscle loss is not due to fasting, but is due to sedintary life style. Fasting burns fat to get the energy it needs to keep going. Muscle is a terrible source of energy but is useful to survive so thats why the body waits to use it for energy last.
All of my information is pretty much taken from body building websites.