I've done it in a deficit. I never gained any muscle, but I did get stronger. (neuromuscular adaptations.)
My wife also did SS in a deficit. She went from a 45lb squat to a 190lb squat, 80lb deadlift to 215lb deadlift. The entire time eating something like 1500 calories. As said before, there's a point where you can hit the wall.
I hit the wall at a 200lb squat and couldn't break through it until I started eating more. And I'm fat (22% bf.)
I'm doing 5:2 now, eating like a monster for 5 days, deficit for 2, and seems to be working out for both weight loss and strength gainnnzzz. (But I've slipped off the paleo wagon to get the 3300-3800 on beast days, so... relevance. )