So while I think the description of your solution is better than I've seen in xstate's docs, I'd be inclined to go with the xstate's more mature software that gives me the ability to represent front-end state in a DAG, since it has a thriving ecosystem and (I assume) better tooling.
But I might give Octopus a spin anyway to see what the DX is like
edit: to be clear, I think the additional constraints on the directed graph model introduced by Octopus may be useful by requiring developers to derive state transitions from updates which can only occur upstream, because that state can't flow back in the other direction. Whereas the dependencies can have cycles with xstate.
So I'm positing you can do everything with xstate that you can with octopus (and more). I'm not necessarily arguing that the ability to do the "and more" part with xstate is not a footgun, just that xstate lets you work with state in a similar way while also having a mature ecosystem of tooling around it. Perhaps the constraints introduced by octopus would result in more robust software in practice; I'm definitely interested to try it for myself and find out