That would still be losing weight(mass). The problem in this thread is that people are considering fat loss and weight loss to be the same thing. They're not. The simple truth is that a caloric deficit will always result in a net decrease in mass. This is fundamentally true of any system. Energy being removed from a system always results in a decrease in mass of that system. This is physics 101. Eating a caloric deficit will always cause a reduction in mass, though it may not be the mass you want to reduce. Eating at a caloric deficit without providing the body with the proper balance of macro-nutrients and exercise could lead to reductions in muscle, bone, and connective tissue mass. Reduction of carbohydrates in one's diet generally has a net positive effect in a caloric deficit due to the fact that there is essentially "more room" in the diet for higher quality nutrients such as proteins and fats. That said, cutting carbohydrates out entirely is a terrible idea as they are the body's primary source of short term energy.

This is what happens all the time when calories in/calories out comes up, it becomes an exercise in pedantry. "It's just calories in/calories out" is not read by any normal person to mean "I should just cut my calorie intake by 500 for the day, and then drink that as olive oil 'cause that's easier to measure" It's there to convey "you can still eat french fries: just not as many."