Proper children reconcile for nested tags

src/reconciler/hotReplacementRender.js

@@ -129,17 +129,19 @@ const mapChildren = (children, instances) => ({
       }
     }
 
-    const newChildren = asArray((child.props && child.props.children) || [])
+    const newChildren = asArray(
+      (child.props && child.props.children) || child.children || [],
+    )
     const nextChildren =
       oldChildren.length && mapChildren(newChildren, oldChildren)
 
     return {
       ...instanceLine,
-      // actually child merge is needed only for TAGs, and usually don't work for Components.
+      // actually child merge is needed only for "HTML TAG"s, and usually don't work for Components.
       // the children from an instance or rendered children
       // while children from a props is just a props.
       // they could not exists. they could differ.
-      ...(nextChildren ? { children: nextChildren } : {}),
+      ...(nextChildren || {}),
       type: child.type,
     }
   }),

test/reconciler.test.js

@@ -213,12 +213,50 @@ describe('reconciler', () => {
 
       incrementGeneration()
       wrapper.setProps({ update: 'now' })
-      expect(First.rendered).toHaveBeenCalledTimes(4)
+      expect(First.rendered).toHaveBeenCalledTimes(3)
+      expect(Second.rendered).toHaveBeenCalledTimes(3)
+
+      incrementGeneration()
+      wrapper.setProps({ second: false })
+      expect(First.rendered).toHaveBeenCalledTimes(5)
       expect(Second.rendered).toHaveBeenCalledTimes(4)
 
+      expect(First.unmounted).toHaveBeenCalledTimes(0)
+      expect(Second.unmounted).toHaveBeenCalledTimes(1)
+    })
+
+    it('should use new children branch during reconcile for full components', () => {
+      const First = spyComponent(() => <u>1</u>, 'test', '1')
+      const Second = spyComponent(() => <u>2</u>, 'test', '2')
+
+      const Section = ({ children }) => <div>{children}</div>
+
+      const App = ({ second }) => (
+        <div>
+          <div>
+            <Section>
+              <First.Component />
+              {second && <Second.Component />}
+            </Section>
+          </div>
+        </div>
+      )
+
+      const Mounter = ({ second }) => <App second={second} />
+
+      const wrapper = mount(<Mounter second />)
+
+      expect(First.rendered).toHaveBeenCalledTimes(1)
+      expect(Second.rendered).toHaveBeenCalledTimes(1)
+
+      incrementGeneration()
+      wrapper.setProps({ update: 'now' })
+      expect(First.rendered).toHaveBeenCalledTimes(3)
+      expect(Second.rendered).toHaveBeenCalledTimes(3)
+
       incrementGeneration()
       wrapper.setProps({ second: false })
-      expect(First.rendered).toHaveBeenCalledTimes(7)
+      expect(First.rendered).toHaveBeenCalledTimes(5)
       expect(Second.rendered).toHaveBeenCalledTimes(4)
 
       expect(First.unmounted).toHaveBeenCalledTimes(0)