Yes, it does seem plausible enough, although it still leaves me with no idea how repeated FMD cycles should in the end increase insulin sensitivity once a steady state of normal diet is resumed. Carbs are presumably reintroduced to someone who otherwise doesn't stay in the keto zone in most diets.
Practical answers to my dilemma seem to be:
a) Don't do FMD or other types of fasting (which seems extreme in the other direction),
b) do fasting which puts you into ketosis but then when leaving fasting, stay in ketosis to obviate the problem of low insulin sensitivity which should only matter for carbohydrate metabolism, (is this true??)
or
c) When leaving ketosis do so only very gradually, while exercising extra to improve / maintain insulin sensitivity. (seems tough if you enter / leave ketosis often, like more than once a week or even once a month).
Going into and out of ketosis often seems to be a no-go for the body. It's a shock to the system start eating carbs again, surely.
If there is a loss of insulin sensitivity for exogenous insulin in type 1s leaving ketosis, compared with before they went into it, then presumably the same is true for type 2s or non-diabetics as well, which would place undue burden on their beta cells and possibly exacerbate their condition.
I think this is what happened to me last year, my beta cell function dropped significantly after ten cycles of FMD. Very disappointing. I think ketosis all the time is really the only answer. So, in effect, follow Bernstein closely or something similar.