I think almost all of us are using it for fat loss - you may not see weight loss, or you might see an upward fluctuation for the first few weeks but that is glycogen and water retention (its unlikely you will see more than, MAX, a few pounds of beginner muscle gain over the course of the first few months unless you are eating a surplus, so any other gain will be your muscles store water and glycogen to repair).

Weight gain or loss is pretty much calories in/out - what a full body strength program does is make sure that you retain as much muscle as possible, because ideally while dieting you want to lose fat and preserve muscle. If you don't strength train, your body will burn both fat and muscle - strength training tells your body that you need those muscles and it should try and preserve them.

The actual scale loss will possibly slow down during this program, but you should see immense physical changes, for the better.

And re: increments - as long as you are increasing load at regular intervals, it doesn't matter how fast. If you want to slow it down, you could do increases every 3rd time, but I'd actually recommend getting some fractional plates instead (a well equipped gym might stock them, mine doesn't so I bring them in my gym bag) and going up every time but in smaller increments. (for example, you can go up a pound a day instead of 5.)

I recommend that way only because eventually for the upper body work it is VERY likely that you will need them in order to progress on the upper body work. At a minimum grab some 1.25 lb ones, they are not ultra expensive. A full set ranging from 1/4 lb to 1 lb ones (so you can increase by .5, 1, 1.5, or 2 lbs per time) is about 50 bucks but gives you more flexibility.

I second the fractional plates recommendation, if you can afford it. Really, it was getting ridiculous trying to increase 5 whole pounds. I could maybe do one rep for each set. And I would fail 3x. And I would deload. I have the fractional plates now, and I increase 1 lb on the upper body exercises and 2.5 lbs on squats and DL. It's been MUCH better for me now.

As for scale loss, I'm not seeing any. But I'm finally seeing some changes that I'm excited about. It took a while, and the results are not exactly conventional (when I want the scale to go down reflecting my hard work...and it doesn't)...but this has been the best decision I ever made regarding my fitness.

My loss has really slowed down since I got really serious about lifting back in January. I think I have lost maybe 25 pounds since then and I was losing a lot faster before that just doing cardio. It's not that I am getting close to goal either...I still have quite a way to go. I have seen a drastic improvement in my body composition regardless of what the scale says...I am smaller now than when I weighed 15 pounds less. I also agree about the fractional weights. I haven't had to use anything smaller than the 2.5 weights but I can see failure coming quickly with the OHP and 5 pounds added each time...that is one tough lift for me. I've heard that some people even go buy big washers that would fit on the barbell at the hardware store and use them as fractional weights...they are like a pound each. I wonder how much the weight locks weigh? Those might even be a pound....maybe you could just put more than one on each side?