Jetpack Compose: Explain to me why the list content is not updated?

I know that in Jetpack Compose you have to change the state of the passed in data in order to trigger a recomposition of the UI to update the UI with any changes. I have also read the documentation about Jetpack Compose state and ViewModels here. But that's a very simple example and does not cover the use case below.

Below is a conceptual scenario where I want to update the state of the list, by updating just one item's state that I wish to be reflected in the Jetpack Compose rendered part. I know I must assign a new list as data, which should trigger the recomposition and below I am using toMutableList() to try to achieve this. But this does not work. When I run this kind of code, recomposition does not happen and the single item's state is not updated in the list.

Could someone please explain to me why this does not work and how should I approach this?

I already know of mutableStateListOf(), but how should I approach this if I want to keep my view models compatible with other non-Jetpack Compose parts of my app, and thus I only want to use LiveData in my view models?

class Model : ViewModel() {
  private val _items = MutableLiveData(listOf<Something>())
  val items: LiveData<String> = _items

  fun update(item: Something) {
    _items.value = _items.value!!.toMutableList().map {
        if (it == item) {
           // Update item. But it's not reflected in Jetpack Compose
        }
     }
  }
}

@Composable
fun ListComponent(model: Model) {
   val items by model.items.observeAsState(emptyList())
   LazyColumn {
      items(items) { item -> 
       ...
      }
   }
}