In terms of health impact, gaining a kilo of muscle is very different to gaining a kilo of fat. Yes, it is possible to gain weight as a result of dieting and exercise, by simultaneously losing fat stores & building muscle volume, or even just building muscle without a fat loss. There are metabolic changes associated with that, meaning that if that was happening you could be getting a significant health benefit without the scale budging - but difficult to tell unless you were taking body measurements and/or using one of those thingos that measure your water volume. I think that's what the original muscle comment was about.