After reading this post on Robb Wolf's site I'm a little curious.
What Matt Lalonde seems to be describing is a calorie restricted, low carb diet. Yet as he progressed, he reports muscle development along with fat loss.
The fat loss part is straightforward. I'm curious though as to whether or not the body would create muscle in a calorie deficit. The only explanation I can think of is that with insulin kept at bay, the body had access to high energy reserves through stored fat (so no calorie deficit).
Could anybody explain if/how this is possible?