Theme provider is not respecting `colorMode="auto"`

[jfuchs]

Describe the bug

To Reproduce

1. Go to https://codesandbox.io/s/clever-volhard-w8csh2?file=/src/App.tsx
2. Toggle your system color mode
3. Note button not changing

Expected behavior
Button changes color mode

Screenshots

Desktop (please complete the following information):

• OS: MacOS
• Browser: Chrome latestish

Additional context

• I believe the issue was introduced in ThemeProvider: Fix setColorMode #1936
• Reloading the page will give the correct auto color mode initially

[siddharthkp]

Can reproduce! The theme is correct on first render based on system settings but isn't responding to changes to system settings after that

system-switch-broken.mov