Vue 3 introduces a significant shift in how cross-component state management and reactivity work, with changes in the underlying system powering reactivity and new API syntax that makes change detection more explicit. The introduction of composition functions provides a clean, flexible way to compose logic inside and between components, allowing for encapsulation of state management related logic without added complexity or performance issues. This enables developers to manage state in a more declarative manner, reducing the need for abstracted patterns like Mixins and Higher Order Components (HOCs). The new syntax also introduces reactive state declared via `ref` and `reactive`, allowing for mutable and reactive references regardless of type.