What is the scoping logic behind React states being used inside functions in custom hooks?

So say you have a custom hook:

useCustomHook()=>{
  const [state, setState] = React.useState(0);
  
  const modifyState = ({state, n}) => {setState(state + n);} 
  
  /*Does state need to be included as an argument/parameter here in modifyState? If, alternatively, 
    
   const modifyState = ({n}) => {setState(state + n)};

   Will state always be 0 in the scope of modifyState, since that was its value when the function was 
   created originally. So everytime modifyState is called, it is equivalent to (n)=>setState(0+n) ?
 */
  
  return [state, modifyState];
}

const FunctionalComponent = () => {
   const [state, modifyState] = useCustomHook(); 
   const n = 5;
   modifyState({state,n}) /* Does state need to be passed here? (since useCustomHook already has its own 
                             copy of state) */

  //... logic ....

  return <div></div>


}

From doing some testing in the console, it appears that state doesn't need to be passed as an argument to modifyState. But, I'm confused as to the scoping logic behind this, and am unsure if the behavior hooks would change it. Could someone explain the logic behind this?