Updating in Redux - Create a new state v/s update existing state - redux

Question

The task is to create a reducer function to handle multiple authentication actions. Use a JavaScript switch statement in the reducer to respond to different action events. This is a standard pattern in writing Redux reducers. The switch statement should switch over action.type and return the appropriate authentication state.
There are two approaches that seem same to me. In fact, I feel method 2 is better than method 1 as it actually updates the state. However freecodecamp seems to believe otherwise. Can someone tell me what is the difference between the 2.
Method 1 - Create new objects
const defaultState = {
authenticated: false
};
const authReducer = (state = defaultState, action) => {
// change code below this line
switch (action.type) {
case "LOGIN":
return {
authenticated: true
};
case "LOGOUT":
return {
authenticated: false
};
default:
return defaultState;
}
// change code above this line
};
const store = Redux.createStore(authReducer);
const loginUser = () => {
return {
type: "LOGIN"
};
};
const logoutUser = () => {
return {
type: "LOGOUT"
};
};
Method 2 : Update existing object
const defaultState = {
authenticated: false
};
const authReducer = (state = defaultState, action) => {
// Change code below this line
switch(action){
case 'loginUser':
state.authenticated = true;
return state;
case 'logoutUser':
state.authenticated = false;
return state;
default:
return state;
}
// Change code above this line
};
const store = Redux.createStore(authReducer);
const loginUser = () => {
return {
type: 'LOGIN'
}
};
const logoutUser = () => {
return {
type: 'LOGOUT'
}
};
The error message that I get in Method 2 is as follows
Error Log