Tried many low carb variations over the years, even carnivore for around 4 months. You can build muscle on them to a certain point depending on carb intake.
Carbs are important for that insulin spike (protein does that too but less carbs are required for the same spike) in addition, the type of workout is also something to consider, since we are interested in bodybuilding, that means we are relaying mostly on anaerobic pathways.
Ketosis is the state of subsiding from fatty acids oxidation, meaning you need oxygen. it's not that you won't be able to recover between sets, you will, but it would take double the time, at least from my experience.
That being said, ketosis has place and a very special one while cutting on AAS, you would retain an incredible amount of muscle while utilizing body fat for energy, have a look at bodybuilders from the 80's and their pre contest nutrition.