useReducer also lets you optimize performance for components that
trigger deep updates because you can pass dispatch down instead of
callbacks.
The above statement is not trying to indicate that the setter returned by useState is being created newly on each update or render. What it means is that when you have a complex logic to update state you simply won’t use the setter directly to update state, instead you will write a complex function which in turn would call the setter with updated state something like
const handleStateChange = () => {
// lots of logic to derive updated state
updateState(newState);
}
ContextObject.Provider value={{state, handleStateChange}}>
Now in the above case everytime the parent is re-rendered a new instance of handleStateChange is created causing the Context Consumer to also re-render.
A solution to the above case is to use useCallback and memoize the state updater method and use it. However for this you would need to take care of closure issues associated with using the values within the method.
Hence it is recommended to use useReducer which returns a dispatch method that doesn’t change between re-renders and you can have the manipulation logic in the reducers.