Fat doesn't form muscle like many people think, however it aids in the formation of muscle in two ways. It provides the body with more weight, AKA more stress on muscles and more work is done for the same weight training, and two it keeps heat in like insulation, causing you to sweat more and oddly muscles need heat to heal at a more rapid rate.
When you work out, you muscle literally rips leaving small bands of empty rips, what happens here is your body then repairs that area by filling those areas in with more muscle(Which needs actual protein and nutrients to grow) and that's actually how muscle grows. You damage muscle, causing small openings or rips which your body fills with new muscle adding mass. Fat doesn't directly help muscle growth, but indirectly. People don't "convert fat to muscle" but instead fat "acts as a catalyst to healing and stress on muscle". If you ever noticed, the strongest guys in the world are fat fat fat. Because they are fat there body is always under more stress then other people, you can't see there muscle but it's there, and a lot of it to. take myself for example, I used to actually struggle with my weight, was 280~ and I would drop 60 pounds, then gain it back cause after losing I had it in my head "Don't need to exercise anymore" and gained it back. I got up to 300 and said fuck it, now at 200, but even when going to the gym, me as a 280 person who NEVER exercised could do more leg press then anyone there. I leg press around 800 when I started, and when I was down to 220 I was hitting 1200~. People who were there that exercised for years doing legs etc could barely get 600-700. Regardless if you notice, most fat people, look at their legs as an example, most of them have NO fat around there calfs, and there legs are huge still, and it's all muscle, due to carrying around their weight constantly.
So the argument you both are having is kind of moot, both people are right, both are wrong.
