I've dealt with diabetes AND kidney disease AND once took care of a cat with liver disease. Granted, the one with the fatty liver wasn't the same as the one with the diabetes and kidney disease.
First, I can't comprehend a vet saying not to feed anymore to a cat with HL. That makes no sense. High bg's are not the same immediate danger as a cat with HL not eating. (But with the high bg's and low eating level, do keep testing for ketones! Ketones can be dangerous as well, but you can test for them.) I say get some food in him.
A friend of mine had a cat not eating and waited way too long to call me about it... by time I got him he was pretty sick and very skinny. I got him to eat a bit of baby food the first night and then he stopped. He was difficult to force feed after the first day. I got him to eat by giving him steak. I cooked it a bit in the microwave and it was still juicy and smelled strong. And something about that just made him want to eat it. I gave him more the next day and a little less the next. Didn't want him hung up on steak, but he did start eating some fancy feast on his own after that. And that started him back on the road of eating. Then he turned into a big piggy. The vet said to just let him eat however much he wanted.
Having a cat with HL not eat is a serious issue. HL can lead to death.
I'm not a vet, I don't know your cat, and maybe your vet knows something I don't. However, if it's really just to keep his bg's down, that doesn't make sense to me. That's what the insulin is for. His bg's might be high due to the stress from the HL. When they're sick, their body is stressed and that can cause the bg's to go up. (That is, you might solve the high bg issue by solving the HL issue.)
That said, the kidney kitty is OK on the regular food. IMO, he's better off on the regular food. A "diabetic food" is actually just what all cats are supposed to be eating. You don't need a prescription food for that to begin with. If he likes Fancy Feast, let him have that. And Hills is bad quality food and I wouldn't feed it to either one. Save yourself some money and stop buying prescription foods. (Why a prescription? If my doctor wants me to eat less fat, he says eat less fat. He doesn't write me a prescription for low-fat milk. I mean, huh?) You can feed the kidney kitty Fancy Feast as well. However, I would like to add a waiver that it is higher phosphorus, which is something you really need to keep down. That's a different subject that you may want to post about, but you don't need to worry about phosphorus for a short time while this issue is going on. (Another waiver that I don't know that cat either, or if there is anything else wrong with him that would preclude him from eating that food. In other words, we can't know if there are other issues going on. But just in terms of the kidney disease, as long as he isn't like end stage, it should be OK.)
However... might it better to separate him just so that you know what he ate and not have to question which cat got what? You definitely want him eating on his own, but do the finger feeding if you have to. He may not take in much at once, so yeah, you may have to do several meals a day. Sounds like the vet is trying to put too many stipulations on things when the priority here is getting food in him. A tube may be in order if you can't do this. There's also meds he can be getting, first of all an appetite stimulant. Second, some vitamin supplements. (Hmm, I'm trying to think if a subq shot on that is better? Or am I remembering that right?) Third, the Sam-E someone else mentioned, which is for liver disease, but somewhat of a difficult med - be nice if you got this under control without having to go that route.
Some reading:
http://maxshouse.com/Feline_Hepatic_Lipidosis.htm
(Max's house has all kinds of good stuff.)