React functional components, setState and immutability

Feeling a little dumb, I've been working with React for 2 years and always thought that you have to use setState with a new copy of the object to avoid mutating the state. However, this example mutates the state and uses setState with the same object reference without any issue.

Why does this work? Is this still best practice?

Working Code Pen

const { useState } = React;

const Counter = () => {
  const [countObject, setCountObject] = useState({count: 0});

  const onClick = () => {
    countObject.count = countObject.count + 1;
    setCountObject(countObject); // mutated object, same reference
    
  }
  
  return (
    <div>
      <p>You clicked {countObject.count} times</p>
      <button onClick={onClick}>
        Click me
      </button>
    </div>
  )
}

ReactDOM.render(<Counter />, document.getElementById('app'))

Your codepen is using an alpha version of React 16.7. Hooks were released in 16.8, so to use hooks reliably, you should be using a version 16.8 or above (in a non-alpha version of React):

enter image description here

You can update the version number of both of the above links by clicking the gear icon in your codepen on the JavaScript pane.

Notice the below snippet uses 16.7.0-alpha.2 and has the same issue you were experiencing:

const { useState } = React;

const Counter = () => {
  const [countObject, setCountObject] = useState({count: 0});

  const onClick = () => {
    countObject.count = countObject.count + 1;
    setCountObject(countObject);
  }
  
  return (
    <div>
      <p>You clicked {countObject.count} times</p>
      <button onClick={onClick}>
        Click me
      </button>
    </div>
  )
}

ReactDOM.render(<Counter />, document.getElementById('app'))
<script src="https://cdnjs.cloudflare.com/ajax/libs/react/16.7.0-alpha.2/umd/react.production.min.js"></script>
<script src="https://cdnjs.cloudflare.com/ajax/libs/react-dom/16.7.0-alpha.2/umd/react-dom.production.min.js"></script>
<div id="app"></div>

However, changing your version to 16.8 or later fixes the issue (as of writing this, we're up to v17.0.2):

const { useState } = React;

const Counter = () => {
  const [countObject, setCountObject] = useState({count: 0});

  const onClick = () => {
    countObject.count = countObject.count + 1;
    setCountObject(countObject);
  }
  
  return (
    <div>
      <p>You clicked {countObject.count} times</p>
      <button onClick={onClick}>
        Click me
      </button>
    </div>
  )
}

ReactDOM.render(<Counter />, document.getElementById('app'))
<script src="https://cdnjs.cloudflare.com/ajax/libs/react/16.8.0/umd/react.production.min.js"></script>
<script src="https://cdnjs.cloudflare.com/ajax/libs/react-dom/16.8.0/umd/react-dom.production.min.js"></script>
<div id="app"></div>