I also don't think you are eating enough (1200 cals is very low) and I think you have probably lost fat and gained muscle - the evidence is in the bigger arms - and therefore the scales aren't shifting because muscle weighs more. I see you have dropped 3lbs now - well done! - and I think if you continue then it will continue to come off.
There is quite a lot of incorrect advice being given on this thread, in particular about the avocados! They are high in fat (good fat) and are very good for you. A common myth is that eating fat makes you fat, but it is sugar, in particular added sugar, along with refined carbs and processed foods (including most breakfast cereals) that are your enemies.
Fat can help you to feel fuller for longer so therefore less likely to crave sweet things. Whoever mentioned the spike in insulin up-thread is right, you want to keep your blood sugar as level as possible and you can do this by eating complex carbs (brown rice, beans, chickpeas, lentils, nuts, root veg), wholegrains, good fats and lots of veg (especially dark green, leafy veg). Also drink lots of water, and try drinking a glass of water before each meal, eat slowly and stop eating when you feel full.
If you try and think of this as a new way of eating for life, rather than another 'diet' and stop weighing and counting absolutely everything, you will still, over time, lose excess weight. If you want to speed up the process, then make sure your plate is at least 50% veg and that you stop eating when you are full (that is a common mistake!)
It is frustrating when the scales don't move, i've been there too, but I started to take measurements and go by how my clothes were fitting and realised things were changing. I found it helped a bit when I did a bit of food combining and eating either protein and veg in a meal, or carbs and veg, eg no mixing pasta, rice, potatoes with meat or cheese. Good luck OP!