diff --git a/.changeset/whole-paws-sort.md b/.changeset/whole-paws-sort.md
new file mode 100644
index 0000000..0f44d3a
--- /dev/null
+++ b/.changeset/whole-paws-sort.md
@@ -0,0 +1,5 @@
+---
+"@playcanvas/react": patch
+---
+
+Fix `shallowEquals` incorrectly returning early before checking all properties.
diff --git a/packages/lib/src/utils/compare.tsx b/packages/lib/src/utils/compare.tsx
index 5704758..3da937d 100644
--- a/packages/lib/src/utils/compare.tsx
+++ b/packages/lib/src/utils/compare.tsx
@@ -51,8 +51,8 @@ export const shallowEquals = (objA: Record<string, unknown>, objB: Record<string
         const propA = objA[key];
         const propB = objB[key];
         // If the object has an equality operator, use this
-        if (hasEqualsMethod(propA)) {
-            return propA.equals(propB);
+        if (hasEqualsMethod(propA) && !propA.equals(propB)) {
+            return false;
         } else if (propA !== propB) {
             return false;
         }