Unfortunately, biochemistry is not the kind of topic that can be easily researched online without formal training. There are a number of points you make that are incorrect. I keto myself, so don't think I am trying to attack your general position here.
Starvation and the keto diet are actually nearly identical from a biochemical perspective. The key pathway is fat mobilization, where fatty acid chains are broken down two carbons at a time to produce energy. When this process starts to happen faster than your body can manage it, some of the chemical constituents of the process actually break down to become the ketones that can be detected in the urine and breath. In other words, ketones are a side effect, rather than a major player.
The idea that a calorie deficit, ie starvation, is somehow bad, is incorrect. Anybody who is using diet and exercise to become more lean is doing the same thing. There is no magic method to lose weight without some form of starvation. The reason why the keto diet does not cause significant lean tissue loss is that the starvation involved is not sufficiently severe.
An important point that you bring up is the idea that the keto diet stabilizes insulin levels. This is basically correct. Insulin signals cells to take up glucose from the blood, and also tells the liver to begin glycogenesis - the process of packing glucose into glycogen. High blood sugar triggers this. These effects are basically reversed by adrenaline, which tells the liver to start breaking glycogen down to make glucose.
Part of the difficulty with this is that with a normal diet, blood sugar spikes after meals. This leads to cyclic variance in levels of glucose, insulin and adrenaline. As the cycle progresses toward the adrenaline end, you start to get cravings for foods that will once again spike your blood glucose.
However, when you are relying on fat mobilization to make glucose, these spikes are greatly reduced. Fat mobilization is not efficient, and is not able to provide sudden bursts of glucose. It is more constant. This makes athletic activity much more difficult aswell.
But this is the real reason why the keto diet works - it mitigates the cycle of spiking and lowering blood sugar, providing a more level and constant supply. This reduces the propensity for craving food.
In essence, the keto diet is not unique in terms of the basic biochemistry of metabolism. It simply makes 'starvation' more tolerable, and easier to manage. For many of us, that is exactly what we need.
But manage to resist!
