"If you pass a prop to a child component, it will update whenever you change state"

Well if you update a state, every children of your component is updated as well regardless of if they have a prop passed.

I know there are way to make react trully reactive like Valtio using proxy or maybe Zustand, but my point is that useState or useContext is not "reactive" at all, you must call a function to rerender the components.

If by "Updated" you mean they are looked at in the virtual DOM to determine if they have to update, then yes. But children aren't repainted onto the DOM just because their parent is. This still is Reactive

By Updated I mean that more than comparing virtual DOM to real DOM. - If you have a useEffect without dependendy, it trigger it. - If you have some map, filter, sort, any lambda in your template, it will be executed again. And that is true for your component and every children recursively.