That said, I'll bet folding money that his blood panel has improved.
You haven't noticed the muscle loss yet b/c the body prioritizes the breakdown of unused/minimally used muscles. But if you keep this up much longer it will start to effect your ability to perform basic feats of strength.
That rate of weight loss you appear to be achieving also causes massive stress on the cardiovascular system.
You need to talk to a doctor, b/c you may be causing long-lasting, serious damage to your body.
Yes. Yes you can.
Gluconeogenesis is difficult and wasteful. Lipolysis is by comparison a doddle. The body will gleefully favour liberating energy from fat stores for a long time before turning to lean tissue.
The idea of "starvation mode" comes from the Minnesota Starvation Study, where subjects had their intake reduced by 25-50% for six months. They were so completely starved that they exhausted their fat stores and broke down lean tissue for energy.