The water loss that you refer to generally occurs with low fat diets as well but to a lesser degree. On low carb, the initial water loss comes from depleting glycogen stores which carry with them 3 grams of water for every gram of glycogen and this is usually within the first 3-5 days. After that, your body has switched over the fat metabolism and burning ketones instead of glycogen. There is also an increase in urination initially, but when you are following the plan as directed and drinking 2+ liters of water per day, this is also replaced. Water loss without replacement = dehydration.