I see Coconut Oil used in many many Paleo Recipes, but I was researching it and found that the US Food and Drug Administration, World Health Organization, International College of Nutrition, United States Department of Health and Human Services, American Dietetic Association, American Heart Association, British National Health Service, and Dietitians of Canada recommend limiting the consumption of significant amounts of coconut oil due to its high levels of saturated fat.
Coconut Oil is even used in Movie theater Popcorn and greatly increases the amount of saturated fat in that popcorn.
If this is the case, why is Coconut Oil being used to substitute Olive Oil? Does anyone know why Coconut Oil is recommended in this lifestyle and can give substantial reason this is a healthier alternative?
Most people like it because they overestimate its fat burning potential from the MCTs, because it is heat stable and not prone to oxidation, because it is low in omega 6, and because frankly it tastes really good.
I do not think it is meant to be consumed in huge quantities, as I am not familiar with a traditional culture that does so. The Kitavans eat it, but fat only makes up 10% of their calories, roughly 4% of which comes from fish oil.
You're going to find that not a lot of people around here put much stock in what those organizations you've listed have to say about diet.
Saturated fat is good for you. If you are burning your bodyfat, you're burning palmitic acid, which is a saturated fat. Recent studies have removed any correlation between consumption of saturated fat and heart disease, which, I think, was the basis of the recommendations you cite above. The MCTs in coconut oil provide a shortcut into ketosis, which can be beneficial in mitigating some neurological issues (possibly Alzheimers; is being used with Epilepsy, etc).
Substitute saturated fat for Olive Oil in cooking when you will be using high heat; there are claims that heating Olive Oil creates trans-fats.
Ned Kock is very good on coconut oil: http://healthcorrelator.blogspot.co.uk/search?q=coconut
It doesn't oxidize at high heat, contains Lauric Acid (a medium-chain fatty acid, where most of the health benefits are derived from), and tastes awesome. As in everything in life, use common sense, and moderate.
Worth learning more about... http://www.thehealthrevival.com/2012/02/coconut-controversy.html