Force = Mass * Acceleration. In a system with constant velocity and direction, power (watts) can be simplified to W = F * V.
In simpler terms, bigger people can put out more watts. Even if they are fat. Now, their efficiency isn’t going to be there, and their power:weight is going to be less. But you can’t tell me that if a fat dude goes in for a liposuction procedure, gets 10-20 lbs of fat sucked out, with no effect on muscle, then gets back on the bike (assuming post-op recovery is short enough not to affect fitness), that their FTP doesn’t drop.
What happens in real life, is that if you continue to train, your body composition will improve, your muscle mass gets bigger, and you get stronger (relative to the drop that occurs with the loss of weight). Plus, there are all the additional cardiovascular benefits from having better body composition.