The BMI was never supposed to be applied to individuals at all, even the guy that designed it knew that, the purpose of BMI is to track changes at the population level. It's absolutely true that if you exercise without changes to your diet then you're more likely to probably increase your bmi rather than drop it. The BMI IS useful for the population level for instance it's unlikely that during the 80s and 90s there was a mass surge in amateur weightlifting across all ages and populations to explain the "obesity epidemic".
The other thing with BMI is that we know now that there are different kinds of body fat, some of it is beneficial (brown fat, lower body fat in women) and some of it is very unhealthy (fat around the organs). BMI makes no allowance for differing levels of these fats, a lot of pear shaped women actually damage their health and self esteem trying to lose that healthy lower body fat.
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