I have a custom hook that processes a certain state variable.
Whenever you change the state It does not update immediately so I have to subscribe to it using useEffect.
However it is categorically impossible to call a custom hook within useEffect.
How does one get their custom hooks to do anything at all with a state variable?
You can not (should not) call a custom hook inside of useEffect, but you can use useEffect inside of your custom hook:
const useMyHook = function( someState ){
    useEffect( function(){
        // do what the hook should do
    }, [ someState ]);
};
If the hook should update also when something else changes, you can just pass that as well:
const useMyHook = function( someState, someDependency ){
    useEffect( function(){
        // do what the hook should do
    }, [ someState, someDependency ]);
};
I suggest to use an array for the dependencies, so that it works similar to useEffect:
const useMyHook = function( label, dependencies ){
    const [ value, setValue ] = useState(0);
    useEffect( function(){
        setValue( value + 1 );
    }, [ label, ...dependencies ]);
    return label + ': ' + value;
};
// ...
const value = useMyHook('counter', [ dependentValue, otherDependentValue ]);
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