I’m T1, not T2, so T2s should take my experiences with keto with a dose of salts. My experiences pretty much mirrored yours, of course I produce no insulin and so I tend to be very sensitive to sugars; my BG will head roof-wards with many carbs. So, yes, my increased stability can be easily explained away and my HbA1c descended, not to T2 levels but certainly to levels that make endos (and my endo in particular) very happy with T1s.
The diet is very good for me, but I can’t keep it up unless I’m alone; my wife’s food is excellent but it is certainly not keto and I wouldn’t want to refuse it even if I could. I think that really does stand in the way of keto as a treatment for either T1 or T2 where appropriate. There is, of course, also the bias against high fat diets and the high-protein alternative (the carnivore diet) can be very expensive.
I agree with you completely that keto and, indeed, any ultra low carb diet is a good experiment for those faced with diabetes, or maybe everyone. I’m starting to have concerns that the AIDS I use now allows me to eat a lot more carbs than are healthy for me, and I’m a T1. I’m certainly putting on weight.
EDIT: This is the link to a 2017 FUD thread which says pretty much what I just repeated…