diff --git a/compiler/packages/babel-plugin-react-compiler/src/TypeInference/InferTypes.ts b/compiler/packages/babel-plugin-react-compiler/src/TypeInference/InferTypes.ts
index 1c4443e5a49..55974db14ce 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/TypeInference/InferTypes.ts
+++ b/compiler/packages/babel-plugin-react-compiler/src/TypeInference/InferTypes.ts
@@ -393,7 +393,7 @@ function* generateInstructionTypes(
               shapeId: BuiltInArrayId,
             });
           } else {
-            break;
+            continue;
           }
         }
       } else {
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.invalid-setState-in-render-unbound-state.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.invalid-setState-in-render-unbound-state.expect.md
new file mode 100644
index 00000000000..423076cc3a4
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.invalid-setState-in-render-unbound-state.expect.md
@@ -0,0 +1,41 @@
+
+## Input
+
+```javascript
+function Component(props) {
+  // Intentionally don't bind state, this repros a bug where we didn't
+  // infer the type of destructured properties after a hole in the array
+  let [, setState] = useState();
+  setState(1);
+  return props.foo;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: ['TodoAdd'],
+  isComponent: 'TodoAdd',
+};
+
+```
+
+
+## Error
+
+```
+Found 1 error:
+
+Error: Calling setState during render may trigger an infinite loop
+
+Calling setState during render will trigger another render, and can lead to infinite loops. (https://react.dev/reference/react/useState).
+
+error.invalid-setState-in-render-unbound-state.ts:5:2
+  3 |   // infer the type of destructured properties after a hole in the array
+  4 |   let [, setState] = useState();
+> 5 |   setState(1);
+    |   ^^^^^^^^ Found setState() in render
+  6 |   return props.foo;
+  7 | }
+  8 |
+```
+          
+      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.invalid-setState-in-render-unbound-state.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.invalid-setState-in-render-unbound-state.js
new file mode 100644
index 00000000000..58e2837692a
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.invalid-setState-in-render-unbound-state.js
@@ -0,0 +1,13 @@
+function Component(props) {
+  // Intentionally don't bind state, this repros a bug where we didn't
+  // infer the type of destructured properties after a hole in the array
+  let [, setState] = useState();
+  setState(1);
+  return props.foo;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: ['TodoAdd'],
+  isComponent: 'TodoAdd',
+};
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/holey-array.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/holey-array.expect.md
deleted file mode 100644
index 160699b115b..00000000000
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/holey-array.expect.md
+++ /dev/null
@@ -1,35 +0,0 @@
-
-## Input
-
-```javascript
-function t(props) {
-  let [, setstate] = useState();
-  setstate(1);
-  return props.foo;
-}
-
-export const FIXTURE_ENTRYPOINT = {
-  fn: t,
-  params: ['TodoAdd'],
-  isComponent: 'TodoAdd',
-};
-
-```
-
-## Code
-
-```javascript
-function t(props) {
-  const [, setstate] = useState();
-  setstate(1);
-  return props.foo;
-}
-
-export const FIXTURE_ENTRYPOINT = {
-  fn: t,
-  params: ["TodoAdd"],
-  isComponent: "TodoAdd",
-};
-
-```
-      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/holey-array.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/holey-array.js
deleted file mode 100644
index d76b88f5791..00000000000
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/holey-array.js
+++ /dev/null
@@ -1,11 +0,0 @@
-function t(props) {
-  let [, setstate] = useState();
-  setstate(1);
-  return props.foo;
-}
-
-export const FIXTURE_ENTRYPOINT = {
-  fn: t,
-  params: ['TodoAdd'],
-  isComponent: 'TodoAdd',
-};
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/preserve-use-memo-transition-no-ispending.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/preserve-use-memo-transition-no-ispending.expect.md
new file mode 100644
index 00000000000..c5bfe197c3a
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/preserve-use-memo-transition-no-ispending.expect.md
@@ -0,0 +1,52 @@
+
+## Input
+
+```javascript
+// @validatePreserveExistingMemoizationGuarantees
+import {useCallback, useTransition} from 'react';
+
+function useFoo() {
+  const [, /* isPending intentionally not captured */ start] = useTransition();
+
+  return useCallback(() => {
+    start();
+  }, []);
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: useFoo,
+  params: [],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validatePreserveExistingMemoizationGuarantees
+import { useCallback, useTransition } from "react";
+
+function useFoo() {
+  const $ = _c(1);
+  const [, start] = useTransition();
+  let t0;
+  if ($[0] === Symbol.for("react.memo_cache_sentinel")) {
+    t0 = () => {
+      start();
+    };
+    $[0] = t0;
+  } else {
+    t0 = $[0];
+  }
+  return t0;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: useFoo,
+  params: [],
+};
+
+```
+      
+### Eval output
+(kind: ok) "[[ function params=0 ]]"
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/preserve-use-memo-transition-no-ispending.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/preserve-use-memo-transition-no-ispending.js
new file mode 100644
index 00000000000..d7560197f03
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/preserve-use-memo-transition-no-ispending.js
@@ -0,0 +1,15 @@
+// @validatePreserveExistingMemoizationGuarantees
+import {useCallback, useTransition} from 'react';
+
+function useFoo() {
+  const [, /* isPending intentionally not captured */ start] = useTransition();
+
+  return useCallback(() => {
+    start();
+  }, []);
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: useFoo,
+  params: [],
+};
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/preserve-use-memo-unused-state.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/preserve-use-memo-unused-state.expect.md
new file mode 100644
index 00000000000..84441267558
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/preserve-use-memo-unused-state.expect.md
@@ -0,0 +1,55 @@
+
+## Input
+
+```javascript
+// @validatePreserveExistingMemoizationGuarantees
+import {useCallback, useTransition} from 'react';
+
+function useFoo() {
+  const [, /* state value intentionally not captured */ setState] = useState();
+
+  return useCallback(() => {
+    setState(x => x + 1);
+  }, []);
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: useFoo,
+  params: [],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validatePreserveExistingMemoizationGuarantees
+import { useCallback, useTransition } from "react";
+
+function useFoo() {
+  const $ = _c(1);
+  const [, setState] = useState();
+  let t0;
+  if ($[0] === Symbol.for("react.memo_cache_sentinel")) {
+    t0 = () => {
+      setState(_temp);
+    };
+    $[0] = t0;
+  } else {
+    t0 = $[0];
+  }
+  return t0;
+}
+function _temp(x) {
+  return x + 1;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: useFoo,
+  params: [],
+};
+
+```
+      
+### Eval output
+(kind: exception) useState is not defined
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/preserve-use-memo-unused-state.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/preserve-use-memo-unused-state.js
new file mode 100644
index 00000000000..e270d4f0192
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/preserve-use-memo-unused-state.js
@@ -0,0 +1,15 @@
+// @validatePreserveExistingMemoizationGuarantees
+import {useCallback, useTransition} from 'react';
+
+function useFoo() {
+  const [, /* state value intentionally not captured */ setState] = useState();
+
+  return useCallback(() => {
+    setState(x => x + 1);
+  }, []);
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: useFoo,
+  params: [],
+};