I am not an endocrinologist by any means so I am just making a guess here. However, I believe it is a slightly educated guess since I have been a type 1 diabetic for close to 20 years so obviously I know we have a lot of common issues that I have a little background in. I think the fact that you are a type 2 diabetic probably plays a key role in why you are seeing a 0.9 RER just before the onset of rapid lactate accumulation (a profile usually associated with going beyond MLSS). In this situation I am sort of linking two pools of knowledge I have, so bear with me.
Diabetic ketoacidosis (DKA) is an extreme condition that usually arises from severe hyperglycemia. Per wikipedia, "DKA results from a shortage of
insulin; in response the body switches to burning
fatty acids and producing acidic
ketone bodies ." As a type 2 diabetic, your body is to some degree resistant to your own insulin. I am not 100% sure the mechanism, but I know that either elevated glucose levels, lack of insulin, etc (I know they are all connected but not sure which one is the true cause) will cause your body to burn fat for energy since it generally reads that type of situation as a shortage of fuel (similar to if you were to run out of glycogen stores, you would begin burning fat). If you are anything like me, I am happy to see any blood sugar reading below 140 mg/dl, even higher if I am exercise (I try to get my blood sugar up between 160-180 before exercise because if I don't it will invariably get low). However, sugars at this level, even at 120, are considered higher than normal, and likely signal to your body to favor burning fat over carbohydrates--even if lactate/pyruvate is freely available.
So while I wouldn't call your situation DKA (that is usually a very severe condition), it is probably more similar to ketosis. Where insulin will normally play a regulatory role where it will promote storage of body fat and block the release of fat from tissue, since your (our) bodies are either resistant to it/don't produce it, fat burning can occur even in situations where normal metabolism would otherwise favor available carbohydrates.
For that reason your body may reach MLSS even when it has the capacity to remove more lactate because of metabolic deficiencies related to insulin resistance. This is not a normal condition however. You do not WANT to be burning less than 100% carbohydrates at MLSS because it essentially represents a reduction in your aerobic capacity (part of your aerobic system is burning fat when it could just as easily burn quicker fuel in the form of lactate/pyruvate. Note this lactate/pyruvate is, in this context, free money because it is gylcogen that has already been "burned" so to speak by your anaerobic system and thus doesn't result in you tapping your limited glycogen stores. Additionally, the lactate accumulates and disassociates into lactic acid and H+ ions which eventually trigger fatigue in your muscles. Thus, by failing to use the lactate aerobically you are triggering more rapid onset of muscle fatigue, too.)