For those of us with a fatty liver, then it will probably (definitely?) be affecting the liver's functions. And there are hundreds of functions. Many more than we are familiar with through diabetes.
The Newcastle Diet has shown that it is very successful at de-fatifying the liver, which has got to be good, hasn't it?
But normal, slower, weight loss will have the same effect, it will just take longer for that effect to show.
I am obese, and I have no idea whether I have ever had a fatty liver or not, but after a few years of low carb, and over a year on very low carb, I don't have a fatty liver now.