You still get minimal DOM updates crossing shadow boundaries. This is true fact.

React's vdom without shadow DOM passes props to components, which all return one big vdom tree, and then there's one big reconciliation. React used with shadow DOM evaluates smaller vdom trees per shadow root, and does more, but smaller reconciliations. It's the same O(n) work.

But in reality it's often much _better_ with shadow roots because the common WC base classes like Lit's ReactiveElement all do change detection on a per-property basis. So you only regenerate vdom trees for components with changed props, and with slots that doesn't include children. So if children of a component change, but props don't, the component doesn't need to re-render. You can do something similar by hand with memo, but that doesn't handle children separately. The compiler will, of course, fix everything.

Every other reactivity system works fine across shadow boundaries. Even the super-fine grained ones like Solid. The only issue with signals-based libraries like Solid is that they pass signals around instead of values, so to get true no-re-rendering behavior with web components you have to do that to, which means picking a signals library, which means less interoperability. The TC39 signals proposal points to a future where you can do that interoperably too.