I am not a medical man, but I think there is a relatively simple explanation which I will use reductio ad absurdum to describe. I start by assuming that Covid is a respiratory disease similar to influenza types, in that it causes the lungs to fill with fluid thus giving breathing difficulties. It also at the same time raises inflammation markers and triggers fevers. It is a virus after all.
It is quite severe for a fever, and the struggle to overcome the fever and the breathing difficulties will lead to a steep rise in adrenaline. One thing that adrenaline does is to cut off the supply of insulin and shut the doors on insulin entering the mitochondria, so our bodies come out of glucose storage mode and into use-it mode. For T2D type diabetics, this is massive insulin resistance. Not sure what it does for insulin users ( not normally noted for IR issues, but we all require some insulin to open up the pathways for glucose to be used and stored) So if left unchecked DKA will follow, and the blood will thicken with the excess glucose. This clogs up the kidneys and leads to blood clots, both are reported as being involved in the more serious stages of Covid progression.
I think this is basically what the OP is describing but they do it in a formal medical way. The main takeaway I get is that Covid is a 2 pass disease. Most people get over the fever and pneumonia stage but then a second wave strikes which is the one that has such devastating results. I think IR locking out the normal pathway for glucose is a viable explanation, and why inducing coma and using steroids is are successful treatments. Also explains why normal oral meds for diabetes are ineffective thus leading to insulin treatment at quite high levels. I suppose diabetics are more prone to having a severe reaction since our compromised metabolism is already on that pathway, Obesity is another associated factor I believe, and that may also predispose the possibility for IR to be present