Dietary, cholesterol is only a small portion of the cholesterol in your body. Your body needs cholesterol for almost every process, but most importantly hormone production and regulation.
For simplicity, lets say your body needs 1000g of cholesterol. If you eat 150g, you body will make 850g of endogenous cholesterol. Eat 100g, your body makes 900g etc. The majority of the cholesterol in a persons body is from the body's own production.
I'm sure everyone has heard of LDL (bad) and HDL (good). This HDL/LDL ratio and type (particle size and density too, but I wont get into that here), is dictated by a lot of other factors... genetics, overall health, activity, etc.
Most importantly, the main killer with regard to cholesterol is inflammation in response to the cholesterol. Cholesterol itself does not do the damage, but the body's natural responses to bad levels/types of cholesterol can create the arterial blockages, plaques and other issues.
With regard to the Keto diet, people will see benefit (if they are coming of the standard western diet), if they eat a blend of healthy fats (Coconut, MCT, Olive Oil etc) in additional to healthy sources of protein and vegetables because this will naturally lead to lower inflammation, lower body fat and higher insulin sensitivity (reduce diabetes). NOTE: Yes you can put you body in ketosis from eating bacon for every meal and lose weight, but this is not ideal for total health.
My opinion of the keto diet is that it can be great for correcting a lot of the issues with most peoples diet. It is not perfect for everyone, it is largely not sustainable long term, but it is effective for a large group of individuals.
