That's not what's happening in the demo. It's effectively updating 2000 virtual DOM nodes at 60 frames a second by scheduling updates so as many things are updated in each 16ms frame as possible. It'll scale with the device. If you have a beast of a computer it might update all 2000 every frame. If you're on a $100 smart phone it'll schedule the updates across several frames.
In the demo each node is a three.js box geometry - react-three-fiber uses react's virtual DOM reconciler to update state on three.js things. That doesn't have to be the case though. The nodes could be HTML elements or SVG things or any other browser renderable item. React doesn't care.
What the demo really shows is that concurrent mode React moves the bottleneck out of the framework and back to the browser - how fast the UI can be updated will be down to the browser instead of what the JS framework can do. That's a really big deal. It'll make writing performant UIs a lot easier which is good for everyone.