From where does the energy for gravitational waves come from?
Radiating gravitational waves makes an inspralling binary orbit closer and faster. (Rob Jefferies)

The source of the energy for both increased kinetic energy, and the gravitational radiation is the same: gravitational potential energy. (PM 2Ring)

Two black holes at a distance of 1 light year have a huge amount of potential energy, about 10^48 Joules of potential energy. As they spiral, a significant amount of that energy is radiated as gravitational waves

This is real mass lost. The mass of resulting black hole is smaller than the sum of the two merging black holes, though at no point does any black hole itself become smaller.