Insulin also affects kidney function and reducing insulin levels will cause the kidneys to retain less sodium. As sodium is released, water goes with it. Dr Mason explains how this works at the 4:33 mark in the following video:
In a normally functioning body, it is a simple equation. However, in an insulin resistant body the equation becomes a bit more complex and insulin plays a much larger role in osmotic balance.
This is why I separate weight loss and energy balance from body health and metabolic systems. Each body behaves differently in regard to metabolic and endocrine systems...but energy balance is a constant across all conditions.
Calories in vs. calories out determines weight. The rest is the tuning and response of the individual system for total health...a different discussion.
You simply cannot gain weight (body fat) unless you have an excess of energy to do it. The inverse is also true. Less energy intake will always result in weight loss.
