Ketone bodies - As noted above, the liver produces ketone bodies during a VLCARB and they flow from the liver to extra-hepatic tis-sues (e.g., brain, muscle) for use as a fuel. In addition, ketone bodies exert a restraining influence on muscle pro-tein breakdown. If the muscle is plentifully supplied with other substrates for oxidation (such as fatty acids and ketone bodies, in this case), then the oxidation of muscle protein-derived amino acids is suppressed. Nair et al. reported that beta-hydroxybutyrate (beta-OHB, a major ketone body) decreases leucine oxidation and promotes protein synthesis in humans [7]. Although blood concen-trations of beta-OHB in their subjects during the infusion of beta-OHB were much lower than concentrations observed in humans during fasting, leucine incorporation into skeletal muscle showed a significant increase (5 to 17%)
This is a dated commentary but it does cover the mechanistic possibilities of muscle retention on a ketogenic diet. Interesting read