There are two different things people mean when they talk about carb-ups/refeeds. Some people mean it in the "cheat day" sense, where they just eat whatever high-carb foods they want for a meal or a day -- pizza, cookies, cake, whatever. There's some anecdotal evidence associating a refeed with breaking a stall by resetting levels of a hormone called leptin, but it can result in falling off the wagon or at least restarting cravings, and pretty much always knocks you out of ketosis. Most people also experience a temporary water weight gain, though this usually goes away in a couple days and does sometimes take a couple more pounds with it.
Other people follow diets called CKD, TKD, or NHE, which incorporate scheduled periods of deliberately eating high-carb and low-fat; CKD uses a 24-48 hour refeed period, while TKD advocates eating smaller doses of simple sugar (think Smarties or Pixy Stix) immediately prior to weightlifting, and NHE uses two weekly carbup meals of 50-100g carbs primarily from starchy sources like bread and pasta. None of these are unrestricted carbfests, though, and lifting weights is a critical component of all three plans. The purpose of the refeed is to support weightlifting performance, because it's very hard to do serious training if you're eating very low levels of carbs for a sustained period of time. Cravings aren't really such an issue here, because it's a cyclical diet, and there are also a lot of guidelines to follow during the refeed period about controlling protein and fat intake. In fact, the refeeds aren't much fun at all, especially with CKD, because you're eating so much sugar in a short period of time that it can really make you feel lousy. It's the "Halloween candy" theory -- if you eat a little bit of junk food, you want more, but if you eat until you're nauseated, you don't want anything to do with sugar for a while!
I personally think the hormone connection is weaker in people who aren't doing heavy training or aren't losing weight at a very rapid clip, and that regular refeeds probably aren't a good idea for the average dieter. I think CKD/TKD/NHE have their place if you're following an intense lifting program, but if not you're not exercising at all or are just doing cardio and/or "toning" levels of weights. Very fast loss can be tough on your metabolism, and weightlifters have higher-than-normal carb needs, so a different approach is sometimes appropriate in these cases. However, for the majority of low-carbers, I think it's generally better to eat consistently and cleanly according to the rules of the diet-of-your-choice, and to be wary of major deviations from your plan.
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