Compound components in React are an advanced pattern that allows multiple components to share an implicit state, enabling them to communicate seamlessly and function collaboratively, akin to HTML's <select> and <option> elements. This approach, exemplified through a <TabSwitcher> component with <Tab> and <TabPanel> children, enhances code reusability and flexibility by allowing developers to control component arrangement without altering their implementation, as the components communicate through a shared context. While render props is another popular pattern, compound components offer a cleaner, more manageable solution by avoiding nested functions that can complicate code readability. The pattern involves a parent component like <TabSwitcher> maintaining a state that is shared with child components using the context API, facilitating the dynamic rendering of content based on user interactions, which is particularly useful for creating interactive UI elements like tabbed interfaces.