SwiftUI @Binding update doesn't refresh view

I feel like I'm missing something very basic, but this example SwiftUI code will not modify the view (despite the Binding updating) when the button is clicked

Tutorials I have read suggest this is the correct way to use a binding and the view should refresh automatically

import SwiftUI

struct ContentView: View {
    @Binding var isSelected: Bool

    var body: some View {
        Button(action: {
            self.isSelected.toggle()
        }) {
            Text(isSelected ? "Selected" : "Not Selected")
        }
    }
}

struct ContentView_Previews: PreviewProvider {
    @State static var selected: Bool = false

    static var previews: some View {
        ContentView(isSelected: $selected)
    }
}

You have not misunderstood anything. A View using a @Binding will update when the underlying @State change, but the @State must be defined within the view hierarchy. (Else you could bind to a publisher)

Below, I have changed the name of your ContentView to OriginalContentView and then I have defined the @State in the new ContentView that contains your original content view.

import SwiftUI

struct OriginalContentView: View {
    @Binding var isSelected: Bool

    var body: some View {
        Button(action: {
            self.isSelected.toggle()
        }) {
            Text(isSelected ? "Selected" : "Not Selected")
        }
    }
}

struct ContentView: View {
    @State private var selected = false

    var body: some View {
       OriginalContentView(isSelected: $selected)
    }
}



struct ContentView_Previews: PreviewProvider {
    static var previews: some View {
        ContentView()
    }
}