#2 is not necessarily true for the average person toro, as well as endurance athletes. You don't need to build muscle mass per se to lose bodyfat, as bodyfat utilization is directly related to cardiovascular exercise. Having more muscle means you burn more calories during exericse and at rest, but in a lot of sports, having higher muscle mass is detrimental, especially in endurance athletics.
HIIT works great, but isn't a panacea either. It burns less of a percentage of fat overall, though burning more fat in aggregate total as compared to lower intensity CV exercise. It is somewhat like plyometrics in that it is difficult for most people to do, and shouldn't be done too often. It's a great boost to the system if you are in good condition, if not, it can be short workout due to exhaustion.
Use it, but build up to it using different splits, such as 15 seconds/3 minutes recovery etc...
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