According to Stephan Guyenet's summaries for layman, this isn't totally unexpected behavior. Your brain regulates the amount of food you consume and bases its food-seeking behavior partially on how palatable the food you eat is. Pure sugar water, or pure oil which is the other recommended food in the Shangri-la diet, has very low palatability. This is because they offer only a single rewarding feature, while the foods that we typically think of as hyper-palatable contain multiple (a presentation he gave a couple years ago lists: calorie density, starch, salt, absence of bitterness, variety, consistency of flavor, fat. sugar, free glutamate [MSG], textures, and certain aromas).
One post on this topic is here which summarizes a paper showing the inverse correlation between satiety and palatibility of foods. In that paper people who ate more palatable foods had higher food consumption two hours after the test food, so a palatable but zero calorie food like diet soda may still cause overconsumption of foods with calories. Conversely, a very low palatability food like sugar water can decrease calorie consumption because it is more satisfying per calorie.
The Shangri-La diet isn't as mysterious as was when this article was written, I think.
Today's post, The Unfinished Mystery of the Shangri-La Diet was originally published on 10 April 2009. A summary (taken from the LW wiki):
Discuss the post here (rather than in the comments to the original post).
This post is part of the Rerunning the Sequences series, where we'll be going through Eliezer Yudkowsky's old posts in order so that people who are interested can (re-)read and discuss them. The previous post was Beware of Other-Optimizing, and you can use the sequence_reruns tag or rss feed to follow the rest of the series.
Sequence reruns are a community-driven effort. You can participate by re-reading the sequence post, discussing it here, posting the next day's sequence reruns post, or summarizing forthcoming articles on the wiki. Go here for more details, or to have meta discussions about the Rerunning the Sequences series.