React.useState does not reload state from props

The argument passed to useState is the initial state much like setting state in constructor for a class component and isn’t used to update the state on re-render

If you want to update state on prop change, make use of useEffect hook

function Avatar(props) {
  const [user, setUser] = React.useState({...props.user});

  React.useEffect(() => {
      setUser(props.user);
  }, [props.user])

  return user.avatar ? 
         (<img src={user.avatar}/>)
        : (<p>Loading...</p>);
}

Working demo

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