Some points to consider:

1) When you step on the bathroom scale, you're measuring mass, not calories.

2) Calories-in calories-out will indeed determine your energy balance. Typically people talking about CICO wrongly assume that only gluttony increases calories in and only sloth decreases calories out.

3) People new to ketogenic diets test their breath and/or urine for the presence of ketones to indicate ketosis. Ketones are energetic particles (ie calories out via breath and urine).

4) Calories in calories out is not a guide to weight loss any more than money in money out is a guide to savings. The problem is not that it's wrong, it's that it's not meaningful advice by itself.

5) If you put yourself in a calorie deficit (artificial starvation) your body will react as if it were natural starvation. You will get tired (decreasing calories out) and hungry (increasing calories in). My understanding of the scientific literature is that calorie restriction is generally counter-productive for weight loss over the long term.