Updating reactive outside of event handler causes state changes to propagate in wrong order

Intended outcome: Child should not see updated state change before parent similar to how React.useContext works

Actual outcome: Child sees updated state before parent component and multiple renders are triggered even if only single reactive var is being changed.

How to reproduce the issue: https://codesandbox.io/s/quirky-williamson-v5d0r?file=/src/App.js

1. [CORRECT BEHAVIOR] Click on any of following buttons. You will notice in logs that new state is always visible to parent component and then in child component root -> (parent-reactive | parent-context) -> (child-reactive | child-context)
   1. Update React Context (this uses react context and works fine)
   2. Update React Context Async (this uses react context and works fine)
      • instead of updating context within handler this has setTimeout to simulate update outside of event handler
   3. Update Reactive (this updates reactive variable within context of event handler and works fine)
2. [INCORRECT BEHAVIOR] Now click on Update Reactive Async
   • instead of updating context within handler this has setTimeout to simulate update outside of event handler
   • With this, child component see state change even before parent. State seem to transition like (child-reactive | child-context) -> (parent-reactive | parent-context) -> (child-reactive | child-context) -> root -> (parent-reactive | parent-context) -> (child-reactive | child-context)
   • I can confirm that if I wrap it with react dom unstable api for batching updates, it works as expected but I assume that it should have worked without it.
   • It leads to crashes where parent conditionally renders child based on state if child gets null in updated state before parent does. Here is sandbox to reflect just such scenario https://codesandbox.io/s/naughty-almeida-mow3i?file=/src/App.js

Versions

• @apollo/client: 3.3.15

[dejavoodooo]

Checking for updates here.

[talha5389]

@jcreighton Updated issue description and added another simplied sandbox to show real implication of it