That's a very good question.

First and foremost, I would not recommend a low carbohydrate diet, particularly when you are performing some type of exercise.  I highly recommend that you have a read of a course that I'm publishing, entitled "Introduction to Physical Freedom" which explains how fat loss is achieved and why carbohydrates are so important in your diet.  However, assuming that you want to stay on a restricted carb diet (for whatever reason), I'll answer your question below.

Adipose tissue (ie. body fat) is broken down during long sustained periods of exercise as a source of energy.  During shorter periods of intense exercise, carbohydrate is the primary source of energy.  However after high intensity cardio activity, more adipose tissue is broken down.  What results in greater fat loss overall is therefore short intense bouts of exercise.

However when you throw muscle into the equation alongside a restricted carbohydrate intake, things get a little more complicated.  On a low carbohydrate diet, you will have very limited access to carbohydrate for energy.  Fat tissue is not broken down quickly enough in intense bouts of exercise as an energy source.  Therefore more muscle tissue would be broken down as a source of energy during the cardiovascular exercise period.

Carbohydrates are still utilised during longer endurance cardio - particularly in the early stages as a source of energy.  However the magnitude of carbohydrate utilised would most likely be less if your intensity isn't right up there because you are expending less calories (ie. using less energy).

You can dig a little deeper though.  L-carnitine is an amino acid (a building block of protein) that is required in order to break down adipose tissue in order to be used as energy.  So this would suggest that, if you are deficient in L-carnitine, the breakdown of fat during an extended period of exercise would be inhibited.  Since the body needs to obtain energy from somewhere (otherwise it will just drop dead) - muscle is next on the list to be broken down.  Therefore significant muscle can also be broken down over an extended period of time.  This is not so much an issue with short intense cardio that use carbohydrates as a source of energy.

In summary, either way you can expect some breakdown of muscle mass.  On a restricted carbohydrate intake, an extended form of exercise is probably the way to go.  Your fat loss will not be as effective, but there may be less muscle wastage (maybe).

The other thing is, on a restricted carbohydrate intake, intense exercise may not be too wise since carbohydrates perform a very important role with regards to recovery.  The more intense your exercise is, the more recovery that is required.  This includes a significantly increased carbohydrate intake.