[kingkongrevenge]

> you can break down muscle for energy

Yes. Lean body mass can atrophy from starvation while fat deposits are growing.

The point is more that the equation as stated is a useless way to think about fat loss. Hormones drive the lean vs. fat configuration of your body, not calorie counting. Cut out someone's pancreas and they'll waste away no matter what they eat. Inject testosterone or growth hormone and they will get leaner and more muscular, all else held constant. Inject insulin and they'll get fatter.

Exercise affects your body composition more effectively when you focus on how it changes your hormone profile rather than count calories burned. High resistance major muscle group exercises boost growth hormone and testosterone and increase insulin resistance. Long distance training actually reduces testosterone levels.