I am looking for a proof for the following conjecture. I think the result follows from applying a generalization of the Cauchy-Binet formula to the matrix $\mathbf{M}$ defined bellow. I've tested it as much as I could using Mathematica and am convinced it is true, but I haven't been able to prove it. Any help will be much appreciated.
Setup
Suppose $\mathbf{A}$ and $\mathbf{B}$ are $(n \times m)$ and $(m \times n)$ matrices respectively, with $n<m$ and $\operatorname{rank}(\mathbf{A})=\operatorname{rank}(\mathbf{B})=n$.
Let $K \equiv \{1,\dots,m\}$, $\mathbf{X}_{k}$ denote the matrix $\mathbf{X}$ keeping only columns and rows in $k$, $\mathbf{X}_{rk}$ denote the matrix $\mathbf{X}$ keeping only rows in $k$, and $\mathbf{X}_{ck}$ denote the matrix $\mathbf{X}$ keeping only columns in $k$. Also, for any $k \subset K$, let $K_n$ be the set of subsets of $K$ with $n$ elements.
Then, using the Cauchy-Binet formula, the determinant of the matrix $\mathbf{A}\mathbf{B}$, denoted by $\Delta$, can be written as
$$\Delta \equiv \det(\mathbf{A}\mathbf{B}) = \sum_{k\in K_n}{\det(\mathbf{A}_{ck})\det(\mathbf{B}_{rk})}. $$
Denote each element of this sum by
$$ d_k \equiv \det(\mathbf{A}_{ck})\det(\mathbf{B}_{rk}), \;\;\;\;\text{for all }k \in K_n.$$
Consider the matrix $\mathbf{M}$ given by
$$ \mathbf{M} = \mathbf{B}(\mathbf{A}\mathbf{B})^{-1}\mathbf{A}, $$
with principal minors given by $\det(\mathbf{M}_{k})$ for any $k \in P(K)$, where $P(K)$ is the power set of $K$ (the set of all subsets of $K$).
Conjecture
I want to show that $$ \det(\mathbf{M}_{k}) = \frac{1}{\Delta}\sum_{j\in \{ i \in K_n : k \subset i \}}d_j, \;\;\;\;\text{for all }k \in P(K) $$
Example to clarify notation
Suppose that $m=3$ and $n=2$. Then, from the definitions we have that
\begin{align} P(K) =& \{\{1\},\{2\},\{3\},\{1,2\},\{1,3\},\{2,3\},\{1,2,3\}\} \;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\; \\[3ex] K_n =& \{\{1,2\},\{1,3\},\{2,3\}\} \\[3ex] \mathbf{A} =& \left[\begin{matrix} a_{11} & a_{12} & a_{13} \\ a_{21} & a_{22} & a_{23} \end{matrix}\right], \;\;\; \mathbf{B} = \left[\begin{matrix} b_{11} & b_{12} \\ b_{21} & b_{22} \\ b_{31} & b_{32} \end{matrix}\right] \\[3ex] \mathbf{A}\mathbf{B} =& \left[\begin{matrix} a_{11}b_{11}+a_{12}b_{21}+a_{13}b_{31} & a_{11}b_{12}+a_{12}b_{22}+a_{13}b_{32} \\ a_{21}b_{11}+a_{22}b_{21}+a_{23}b_{31} & a_{21}b_{12}+a_{22}b_{22}+a_{23}b_{32}\end{matrix}\right] \end{align}
and the Cauchy-Binet formula implies
\begin{align} \det(\mathbf{A}\mathbf{B}) =& \det(\mathbf{A}_{c\{1,2\}})\det(\mathbf{B}_{r\{1,2\}}) + \det(\mathbf{A}_{c\{1,3\}})\det(\mathbf{B}_{r\{1,3\}}) + \det(\mathbf{A}_{c\{2,3\}})\det(\mathbf{B}_{r\{2,3\}}) \\[2ex] =& \det\left[\begin{matrix} a_{11} & a_{12} \\ a_{21} & a_{22} \end{matrix}\right]\det\left[\begin{matrix} b_{11} & b_{12} \\ b_{21} & b_{22} \end{matrix}\right] + \det\left[\begin{matrix} a_{11} & a_{13} \\ a_{21} & a_{23} \end{matrix}\right]\det\left[\begin{matrix} b_{11} & b_{12} \\ b_{31} & b_{32} \end{matrix}\right] + \\[1ex] & \det\left[\begin{matrix} a_{12} & a_{13} \\ a_{22} & a_{23} \end{matrix}\right]\det\left[\begin{matrix} b_{21} & b_{22} \\ b_{31} & b_{32} \end{matrix}\right]. \end{align}
Again, using the definitions above we have that
\begin{align} d_{\{1,2\}} \equiv & \; \det(\mathbf{A}_{c\{1,2\}})\det(\mathbf{B}_{r\{1,2\}}) \;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\\[1ex] d_{\{1,3\}} \equiv & \; \det(\mathbf{A}_{c\{1,3\}})\det(\mathbf{B}_{r\{1,3\}}) \\[1ex] d_{\{2,3\}} \equiv & \; \det(\mathbf{A}_{c\{2,3\}})\det(\mathbf{B}_{r\{2,3\}}) \\[3ex] \Delta \equiv & \; d_{\{1,2\}}+d_{\{1,3\}}+d_{\{2,3\}} \end{align}
and, with some algebra, it is easy to verify that the principal minors of $\mathbf{M}$ can be written as
\begin{align} \det(\mathbf{M}_{\{1,2\}}) =& \; \frac{1}{\Delta}\sum_{j\in \{1,2\}}d_j =\; \frac{1}{\Delta}d_{\{1,2\}} \\[2ex] \det(\mathbf{M}_{\{1,3\}}) =& \; \frac{1}{\Delta}\sum_{j\in \{1,3\}}d_j =\; \frac{1}{\Delta}d_{\{1,3\}} \\[2ex] \det(\mathbf{M}_{\{2,3\}}) =& \; \frac{1}{\Delta}\sum_{j\in \{2,3\}}d_j =\; \frac{1}{\Delta}d_{\{2,3\}} \;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\;\; \\[2ex] \det(\mathbf{M}_{\{3\}}) =& \; \frac{1}{\Delta}\sum_{j\in \{\{1,3\},\{2,3\}\}}d_j =\; \frac{1}{\Delta}(d_{\{1,3\}}+d_{\{2,3\}}) \\[2ex] \det(\mathbf{M}_{\{2\}}) =& \; \frac{1}{\Delta}\sum_{j\in \{\{1,2\},\{2,3\}\}}d_j =\; \frac{1}{\Delta}(d_{\{1,2\}}+d_{\{2,3\}}) \\[2ex] \det(\mathbf{M}_{\{1\}}) =& \; \frac{1}{\Delta}\sum_{j\in \{\{1,2\},\{1,3\}\}}d_j =\; \frac{1}{\Delta}(d_{\{1,2\}}+d_{\{1,3\}}) \end{align}
Moreover, $\det(\mathbf{M}_{\{1,2,3\}}) =0$ follows from the fact that $\det(\mathbf{M}_{\{1,2,3\}})$ is a principal minor of order $3>2=n$. All principal minors of $\mathbf{M}$ of order greater than $n$, are equal to zero, since $\operatorname{rank}(\mathbf{M})=n$.
Attempts at the proof using the suggestions by @darijgrinberg
Fix $k \in P(K)$ and let $v\equiv |k|$, i.e. the number of elements in $k$. First suppose that $v \gt n$, so that $\det(\mathbf{M}_k)=0$, since $\operatorname{rank}(\mathbf{M}_k)=0$, and $\{ i \in K_n : k \subset i \} = \emptyset$, so that the conjecture holds trivially.
Next, suppose that $v \le n$. What follows is tentative.
Working with the definition of $\mathbf{M}_{k}$:
By definition,
$$ \mathbf{M}_{k}=\mathbf{B}_{rk}(\mathbf{A}\mathbf{B})^{-1}\mathbf{A}_{ck} $$
where $\mathbf{B}_{rk}$ and $(\mathbf{A}\mathbf{B})^{-1}\mathbf{A}_{ck}$ are $(v \times n)$ and $(n \times v)$ matrices respectively. Let $L\equiv \{1,\dots,n\}$ and $L_v$ be the set of subsets of $L$ with $v$ elements, and from the Cauchy-Binet formula we have that
$$ \det(\mathbf{M}_{k})=\sum_{j \in L_v}\det\left(\mathbf{B}_{rk,cj}\right)\det\left((\mathbf{A}\mathbf{B})_{rj}^{-1}\mathbf{A}_{ck}\right), \tag1$$
and
$$ \det\left((\mathbf{A}\mathbf{B})_{rj}^{-1}\mathbf{A}_{ck}\right)=\sum_{i \in L_v}\det\left((\mathbf{A}\mathbf{B})_{rj,ci}^{-1}\right)\det\left(\mathbf{A}_{ri,ck}\right).$$
So that
$$ \det(\mathbf{M}_{k})=\sum_{i,j \in L_v}\det\left((\mathbf{A}\mathbf{B})_{rj,ci}^{-1}\right)\det\left(\mathbf{A}_{ri,ck}\right)\det\left(\mathbf{B}_{rk,cj}\right),$$
and since
$$ (\mathbf{A}\mathbf{B})^{-1}=\frac{1}{\Delta}\operatorname{adj}(\mathbf{A}\mathbf{B}) \implies (\mathbf{A}\mathbf{B})_{rj,ci}^{-1}=\frac{1}{\Delta}\operatorname{adj}(\mathbf{A}\mathbf{B})_{rj,ci} $$
it follows that
$$ \det(\mathbf{M}_{k})=\frac{1}{\Delta^v} \sum_{i,j \in L_v}\det\left(\operatorname{adj}(\mathbf{A}\mathbf{B})_{rj,ci}\right)\det\left(\mathbf{A}_{ri,ck}\right)\det\left(\mathbf{B}_{rk,cj}\right).$$
Next, for each $i,j \in L_{v}$ define $i'\equiv \{1,\dots,n\}\setminus i$ and $j'\equiv \{1,\dots,n\}\setminus j$, then it follows from Jacobi's theorem that
$$ \det(\operatorname{adj}(\mathbf{A}\mathbf{B})_{rj,ci})=(-1)^{\sigma_{ij}}\det(((\mathbf{A}\mathbf{B})^{\top})_{rj',ci'})\Delta^{v-1}=(-1)^{\sigma_{ij}}\det(\mathbf{A}_{rj'}\mathbf{B}_{ci'}) $$
where
$$ \sigma_{ij} \equiv i_{v+1}'+\cdots+i_{n}'+j_{v+1}'+\cdots+j_{n}' $$
and, therefore,
$$ \det(\mathbf{M}_{k})=\frac{1}{\Delta}\sum_{i,j \in L_{v}}(-1)^{\sigma_{ij}}\det(\mathbf{A}_{rj'}\mathbf{B}_{ci'})\det(\mathbf{A}_{ri,ck})\det(\mathbf{B}_{rk,cj}) $$
So far I haven't been able to proceed from here.
Working with the conjecture equation:
Notice that for any $j \in K_{n}$,
$$ \det((\mathbf{A}\mathbf{B})^{-1}\mathbf{A}_{cj})=\frac{1}{\Delta}\det(\mathbf{A}_{cj}), $$
so that the conjecture can be rewritten as
$$ \det(\mathbf{M}_{k}) = \sum_{j\in \{ i \in K_n : k \subset i \}}\det(\mathbf{B}_{rj})\det((\mathbf{A}\mathbf{B})^{-1}\mathbf{A}_{cj}), \tag2$$
which looks similar equation $(1)$, rewritten here for convenience
$$ \det(\mathbf{M}_{k})=\sum_{j \in L_v}\det\left(\mathbf{B}_{rk,cj}\right)\det\left((\mathbf{A}\mathbf{B})_{rj}^{-1}\mathbf{A}_{ck}\right). $$
I am not sure how to deal with the difference in the indexes between the two equations. My guess is that I will need to use a Laplace expansion to equation $(2)$.