I don`t buy it either. I`m a huge fan of Layne, everybody on 800 calories doing 2 hours of cardio will lose weight and achieve contest shape. They either don`t give them enough time or don`t report correctly their food intake. Also get freaked with water weight.
And here`s where Layne goes marginally wrong (and he knows it) - nobody gains weight while in deficit. The Minnesota study is pretty explicit - even after 6 months of dieting on severe deficit 50%, metabolic slow down accounts for 15% of the initial rate.
There`s no much more that could be said.
As for adding food slowly - well 5-7 gr a week is irrelevant! However, 50 gr a week could be beneficial and helpful in terms of prevented water weight gains, stable blood sugar, psychological aspect.
That`s my .2 cents though.