The body is generally less anabolic when calorie intake is lower, but at a cellular level there is still plenty of energy around because we all carry over 10,000 cals with us in fat, glycogen and muscle stores. Ive read that an average athletic man has around 40,000 cals stored in fat and sugar...
On the other side if training is breaking down muscle and the protein is there, it’s very possible and even very likely that those who haven’t been training hard will gain muscle on this diet.
If you’ve already reached something like your natural muscular potential and you’re not supplementing hormones or peptides then it’s unlikely you’ll gain significant muscle on this diet.
Keep in mind that muscle gain is generally slow. Short bursts of growth are possible but what works best is getting stronger for reps year after year while keeping the tissues healthy.