No true, when I was dieting my first season, I put on muscle during my comp prep.
My avatar is from my first season competing, and it is 100% natural, I didn't even use OTC fat burners in this picture.
I got to somewhere between 8-10%, which is very low for a woman.
I used carb cycling and carb tapering.
There is a physiological explanation for this: hunger stimulates ghrelin which triggers growth hormone.
I also know I am not the only natural that has experienced muscle growth during comp prep.