Ones metabolism is a complicated subject matter, and does not change virtually overnight even when going from 2500c calories to a starvation level of 500c calories. It will take some time, how long just depends on the scenario specifics and the specific person.
At first, logic tells us, that if your calorie trend was approximated 2500c calories per day (say for a month or more, with the average healthy person with no known issues), and then this same person suddenly drops to 500c calories per day (and need a base maintenance of 2500c), the body is going to react pretty strong---at first.
Oh, my a miracle!
As the short time passes (and body weight subsequently drops), calorie needs also change due to the weight variance. In addition, since 500c calories is not going to incorporate a lot of carbohydrates (anyway, and would be used if the were), water weight is going to shift as well. So briefly, we have water loss effecting weight and a strong response to the caloric drop, effecting weight, and ones glycogen liver storage will also deplete, if one on it long enough.
Within this sort of arrangement and given time, the body is simply going to change the way it uses energy, down regulate and up regulate certain hormones and functions, and eventually it will effect metabolism as it slows to conserve vital elements of the body (and caloric needs and vital needs drop as weight subsequently drops). I am apprehensive in saying metabolic damage, as I see this term as over used. The body is pretty damn good at getting what it needs and conserving for long periods-even if the results are less the optimal than the dieter wants (such as the body eating its own muscle, and fat, and other things to survive), and increasing certain hormones compelling you to eat at a very high intensity rate (without drugs). However, the metabolism will slow with the weight variances going down, and other reasons.
There is no magic here. And, it is certainly a diet I would never recommend to anyone for healthy "good tissue loss", and health.
After losing 40+ unwanted lbs: