In the first week, we do lose water from cells and digestive system & that water takes up room.

The 'adequate' supply of protein in LC diets supplies the body with needed material for making repairs and adding to muscle tissue. If you've been on a low cal or low fat diet, you may have been needing protein for quite a while.

If you exercise, you will put on new muscle tissue. BUT you will be losing fat if you're on LC eating. And fat takes up more room than the same weight of muscle.

You lose "fluffy" and gain "sleek". The exchange won't show on the scale because the fat lost could equal the muscle gained, just as a pound of iron is smaller than a pound of feathers.