Unchecked, this can lead to ketoacidosis as the ketones released by lipolysis (fat burning) for fuel turn the blood acidic (although full blown ketoacidosis is rare in type 2, since there is some insulin floating around). The
ketogenic diet (lots of fat, regular protein, very low carb) exploits the same mechanism, but at a much lower level that doesn't turn the blood acidic.
Sorry, the section of bio class that dealt with cell signalling used diabetes as a model to help us understand.