Can 'client_store_dispatched' and 'client_store_ready' steps be merged together? We could then get rid of this additional effect and check for step.step !== 'client_store_ready' || !clientDBStateLoaded in the bottom effect.

Why do we need dependencies for dispatch and isRehydrated here?

Following this up, I'd name this merged step client_store_dispatched and in the latter useEffect:

const clientStoreReady = step.step === 'client_store_dispatched' && clientDBStateLoaded;
if (!clientStoreReady) {
      return;
}

This will probably give maximum readability