H'okay...
In short - ketones are a by-product of fat burning, and are a good thing. Your brain uses them as fuel in place of carbohydrate as it cannot metabolise fat*, and they act to suppress hunger (which is why after a week, you can survive on 600cal a day without wanting to gnaw your own arm off). The rest of your body runs on the fat metabolism itself. However too many ketones accumulating in the system are not a good thing, so the body seeks to flush them out periodically.
I take the point about water retention, but as you can only lose the weight as a result of retained water once, it's still moot as to whether more water = more weight loss, in the longer term.
So, in a way, everyone's right. A bit.
* which is why ketosis + alcohol + no carbs = stops ketosis with no other fuel source in it's place = blacking out.