It COULD reduce your fatloss compared to your muscle loss, but your weight should still be dropping if calories are in the negative zone. If you're not losing any weight, then it could be because you are not in calorie deficit, you're gaining muscle while losing fat (sounds ideal, doesn't it), or you're losing fat/muscle but fluid retention is going up. Stress (such as dieting or overtraining) can cause fluid retention. Or maybe your scales are broken. No way of knowing which it is without a decent body comp.