diff --git a/packages/dts-test/h.test-d.ts b/packages/dts-test/h.test-d.ts
index 62e619c22bd..0bfac779ec6 100644
--- a/packages/dts-test/h.test-d.ts
+++ b/packages/dts-test/h.test-d.ts
@@ -32,6 +32,7 @@ describe('h inference w/ element', () => {
   // slots
   const slots = { default: () => {} } // RawSlots
   h('div', {}, slots)
+  h('div', {}, () => 'hello')
   // events
   h('div', {
     onClick: e => {
@@ -58,6 +59,7 @@ describe('h inference w/ Fragment', () => {
 describe('h inference w/ Teleport', () => {
   h(Teleport, { to: '#foo' }, 'hello')
   h(Teleport, { to: '#foo' }, { default() {} })
+  h(Teleport, { to: '#foo' }, () => 'hello')
   // @ts-expect-error
   h(Teleport)
   // @ts-expect-error
diff --git a/packages/runtime-core/__tests__/vnode.spec.ts b/packages/runtime-core/__tests__/vnode.spec.ts
index 653613ddb2e..19266bbec68 100644
--- a/packages/runtime-core/__tests__/vnode.spec.ts
+++ b/packages/runtime-core/__tests__/vnode.spec.ts
@@ -120,8 +120,6 @@ describe('vnode', () => {
   })
 
   describe('children normalization', () => {
-    const nop = vi.fn
-
     test('null', () => {
       const vnode = createVNode('p', null, null)
       expect(vnode.children).toBe(null)
@@ -145,10 +143,10 @@ describe('vnode', () => {
     })
 
     test('function', () => {
-      const vnode = createVNode('p', null, nop)
-      expect(vnode.children).toMatchObject({ default: nop })
+      const vnode = createVNode('p', null, () => 'foo')
+      expect(vnode.children).toBe('foo')
       expect(vnode.shapeFlag).toBe(
-        ShapeFlags.ELEMENT | ShapeFlags.SLOTS_CHILDREN,
+        ShapeFlags.ELEMENT | ShapeFlags.TEXT_CHILDREN,
       )
     })
 
diff --git a/packages/runtime-core/src/vnode.ts b/packages/runtime-core/src/vnode.ts
index 178ceec41bd..8404564c46b 100644
--- a/packages/runtime-core/src/vnode.ts
+++ b/packages/runtime-core/src/vnode.ts
@@ -810,8 +810,8 @@ export function normalizeChildren(vnode: VNode, children: unknown) {
       }
     }
   } else if (isFunction(children)) {
-    children = { default: children, _ctx: currentRenderingInstance }
-    type = ShapeFlags.SLOTS_CHILDREN
+    normalizeChildren(vnode, { default: children })
+    return
   } else {
     children = String(children)
     // force teleport children to array so it can be moved around