This gives a good breakdown: https://overreacted.io/algebraic-effects-for-the-rest-of-us/
Lots of use of context managers in Python are for accomplishing this. Smalltalk error handlers are like this (different than try/catch). Or Scheme's with-output-to-file... I got the sense that variables that start and end with stars in Common Lisp are used for this, but I was never clear if it was convention or an actual language feature.
I think I'd like it in React too if they just hadn't tried to be so clever.
You could achieve the same effects by passing down callbacks.
I thought the reason why this is good for Errors, Themes and Loading (Suspense), is because they're so common, that you can always expect someone up in the hierarchy to consider it, and therefore sacrifice some type safety for less verbosity.
The article mentions that "usually the fact that a function can perform an effect would be encoded into its type signature", which is why I don't understand the need in this example.
Agreed hooks are… something else.
I think it looks functional because it's only easy to reason about if you write functional code.
I suppose it tries to solve some of the same problems as OO, like related state and private transitions. But it feels like React itself is the God Object.