"I've been told that it's likely that fat is turning to muscle,"
You want to challenge that.
Fat cannot turn into muscle. They are two different body tissues.
You can lose fat. And you can gain muscle. But then again, you normally cannot do both at once and I highly doubt CrossFit is a program for that - talk to a body sculptor if that's what you desire.
In actuality, you're probably losing fat but retaining some water. Water shows on the scale, but not in inches. Check your measurements - are you losing pant sizes?
I would seriously question any professional fitness expert who vocalised "Your fat is turning into muscle".
Deb, in New Zealand