where does the kinetic energy that is lost go?

I'm not certain about that , there may be some sort of negative energy or something that the energy flows into or is attracted by.

my take on this is that it does not go anywhere , it just disappears , because the particles decrease in speed , the only reason there is any kinetic energy is motion.

this is why a black hole is possible.
only in reverse , the heat and pressures which are the result of gravity compress the mass inside the black hole so much that energy is expelled in the form of gamma rays.

the atoms are compressed so much that the orbits of the atoms
are are forced to move to a lower orbit by pressure , this reduction in orbit of the particles produces more and more heat.

I dont think that the particles slow down as they move to a
lower orbit , they maintain their speed and eventually the heat
and pressures of the particles overlapping result in an energy release.

when the energy is expelled the mass inside the black hole decreases by the amount of energy that is expelled.

which allows more room for more mass inside the black hole.

what we are discussing is sort of like the reverse of a black hole.

a black hole is the result of more pressure and heat.
what we are discussing is the result of
less pressure and heat.

in physics reversing a process in order to achieve a reversal of results is normal.

so by cooling a mass the particles are not as excited as they normally are so they slow down , they do not orbit as fast as they normaly do because they are less excited , in fact they move inward towards the center because their slower velocity will not allow them to maintain their current orbit.

there is less pressure and less heat.

so the atoms can get closer and closer to each other.
because the orbits of the particles have decreased.

which is why cooling a gas can produce superfluidity.

3/4 inch of dust build up on the moon in 4.527 billion years,LOL and QM is fantasy science.