Insulin does drive protein in the muscles but it also stops lipolysis in its tracks. Therefore when there is a lot of insulin in your system you won't be burning much fat. Therefore if you keep them elevated at all times you can guess what would happen.
The 1 day refeed on a normal diet is mainly to restore leptin levels. However on a keto diet it does more than this. It refills glycogen stores and it rushes protein into the muscles to hopefully replace any that was lost during the week. When no insulin is present no muscle building will take place. That is why long term keto diets without carb ups are the last thing you should do if you're interested in gaining muscle or keeping it for that matter.
Therefore the perfect diet should only promote insulin surges during optimal times, like a post workout meal and on the refeed day. During other times you want to keep your insulin levels low to moderate. Insulin is present even when only protein is ingested so don't let people fool you into thinking a keto diet has zero insulin because it lacks carbs. Insulin is both the enemy and the friend as you can see.
That being said, a diet in moderate carbs, high protein, moderate fat has just as much chance for success as a keto style diet given that you still perform the 1 day refeed(aka carbup).
This is the point I try to stress so vehemently. Keto diets should be considered a last measure for those who have tried all else and failed. Someone new to dieting shouldn't just jump on a keto diet because it's supposedly *the best*. Personally if I could lose weight just as good on a less restrictive diet I would, and the only way to find out if you can is to try.
I've done the keto diet and it worked. However it didn't work any better than an iso-caloric one so I chose to go back to what was better for me. Don't let anyone tell you a keto diet is better for you just because it is better for them. If the difference in weight loss between 2 diets was only a pound over a 12 week span but you hated the one that caused the extra pound of loss would you; follow it only for the extra pound of loss or choose the other because you enjoyed it more? If you chose the latter then you are well on your way. If you chose the former then just do the damn keto diet and don't bother learning any more about dieting.