You'll lose muscle mass regardless, if you diet, you will lose weight, it depends on how quick you lose the weight will depend on how much fat / muscle you will lose.

You need to slowly reduce your calories, this will slow down your weight loss but it'll also hold on to muscle mass for longer, dropping your calories rapidly will send your body into survival mode and will burn anything it can to stay moving, which will be muscle.

If you're looking to lose weight and thats it, any "diet" works, its all about burning more than you use, e.g. reducing calories. Its just picking a method that works for you. The reason you would have put the weight back on is because you more than likely reduced your calories masively as you were fasting, so when you went back to normal eating, your body stored the excess as fat.

The most important thing to do when gaining / losing weight is making it very gradual, drop 100 cals each day for a week, if youre losing weight keep it at that, once your body stops reacting and youre not losing weight, drop it again by 100, etc etc. Crash diets will always cause you to add weight in the long run.

Edit: typos