Sounds like a bioimpedance scale, which does indeed count water as lean body mass (everything that's not fat). So your water level probably has a bigger effect than the muscle measures.

2 kg would be a lot of muscle mass lost in a month maybe, so I'd suspect the measure is not that accurate.

However! it's the trend that counts. Are you getting the trainer to take tape measurements too? that would be cool.

On the protein - 18g for breakfast, 37 for lunch, 48 for dinner = 104 from my fitday. So that is about 2x your LBM in kg, in protein per day. That sounds in the ballpark to me.