But isn't it a false conclusion? Just because you have a pound of muscle, the pound of fat will go away? Even though the muscle clearly takes up less space, the fat you have doesn't shrink in size or get pulled in closer to the body just because you gained a pound of muscle. You are still left with a pound of fat covering your hard-won muscle. Unless of course, the fat was burned off as you gained the muscle.
It is possible to build muscle, I would think, and not lose fat. You can gain muscle and still look fat/chubby/overweight.