Which is best pass setState or return the state value from a custom hook (React)

I'm wondering which of these two approaches is best for handling state when using custom hooks in react.

Having read this article on writing testable react hooks I've started having a custom hook associated with a component to act as a single entry point for the state and business logic.

However, it has made me wonder which approach is best for handling state. Should I keep lots of state values and pass the setState action to other custom hooks or should I return a value and let the more specific hook handle the more specific state? I've made a basic example to illustrate what I'm trying to articulate!

// useMyComponent.ts

// Approach 1

export default (): {
  foo: string;
} => {
  const [foo, setFoo] = useState < string | undefined>();

  // State contained within this custom hook
  const [authorisedInfo, setAuthorisedInfo] = useState<string | undefined>();
  const [googleToken, setGoogleToken] = useState<string | undefined>();
  useEffect(() => {
    // setState passed down and set within a different custom hook
    useSignInWithGoogle(setGoogleToken);
  }, []);
  useEffect(() => {
    if (!googleToken) return;
    usePerformAuthCall(setAuthorisedInfo);
  }, [googleToken]);

  useEffect(() => {
    if (!authorisedInfo || !googleToken) return;
    const { foo } = doSomethingHere(authorisedInfo, googleToken);
    setFoo(foo);
  }, [authorisedInfo, googleToken]);

  return { foo };
};

// Approach 2

export default (): {
  foo: string;
} => {
  const [foo, setFoo] = useState < string | undefined>();

  useEffect(() => {
    // state value passed back from the custom hook
    const { googleToken } = useSignInWithGoogle();
  }, []);
  useEffect(() => {
    if (!googleToken) return;
    const { authorisedInfo } = usePerformAuthCall(setAuthorisedInfo);
  }, [googleToken]);

  useEffect(() => {
    if (!authorisedInfo || !googleToken) return;
    const { foo } = doSomethingHere(authorisedInfo, googleToken);
    setFoo(foo);
  }, [authorisedInfo, googleToken]);

  return { foo };
};

Thanks for the help!