Thanks for the answer! This doesn't immediately solves it but leads to more insights. Adding some print statement it seems that the onAppear and onChange is effectively acting on the Text(parent.name), not the contextMenu Button. .onChange does print differently upon children change, but then all list items is now sharing the same disableDelete. This approach won't work as it would require an array of disableDelete to track each Text(parent.name).

.disabled(!parent.children.isEmpty) Only seems to capture the initial state. it doesn't enable/disable the button when parent.children is updated.