Thanks for taking the time to hear my perspective.
I'm familiar with your work and I would be naive to think that somehow I've stumbled onto something that you and that the React team haven't considered 50 times over.
With that, I trust your word for it that Hooks are necessary in order for React to achieve some nice internal optimizations.
With that aside, I think it becomes a subjective question. How should we prioritize API vs performance? And how bad are the tradeoffs in each case?
In the context of a framework, I personally consider it a top priority to build an explicit API, free from "magic", that constructs in the mind of the developer a robust mental model of the app that they've built.
I also consider it important to give the developer all of the tools that they need to build a robust app without necessarily doing the work on their behalf. I believe in forcing them to do the final connecting of the puzzle pieces they're also forced to understand and visualize the puzzle in its entirety.
Because I value these things in a framework I personally would be hesitant to compromise API for the sake of internal opportunities. But again, I don't think I know enough about those internals to say with confidence that API should be preferred in this case.