We currently use Lit for the framework on top (you do need one, that's fine). For state management we just pass props around, works great and allows community to easily develop custom cards that can plug into our frontend.
The downside is lack of available components. Although we're not tied to a single framework, and can pick any web component framework, the choices are somewhat limited. We're currently on material components and migrating some to Shoelace.
I talked more about our approach to frontend last year at the Syntax podcast[2].
[1] https://www.home-assistant.io [2] https://syntax.fm/show/880/creator-of-home-assistant-web-com...