It has to do with how the body responds to the release of insulin. Keto/low carb works because your blood sugar stays low, so fats (generally) become fuel rather than storing it away in your arteries.

For a more elegant and educated explanation, I highly suggest Gary Taubes: Good Calories Bad Calories (or any of his works, really).

Edit: I should add that for people without metabolic disorders, there is more wiggle room, but the principle stays true.