Per the description, there is no particular event that the Halo of Spores ability is actually a reaction to. Given that it's an Unearthed Arcana feature, it may be modified to match other reaction-based abilities and thus actually trigger as a reaction to something if/when it's properly published.

This forum post seems to list all the different reaction-based abilities/features. Many are tied to attacks or damage caused by the enemy (or by the character themselves), and some are triggered by nearby allies' abilities, but they do all seem to have some sort of trigger.

That said, even without a specified trigger, reactions work the same way: if/when you use a reaction (which can be on any turn, including yours), you can't use another one until the start of your next turn.

First, about the feature's wording.

The wording of the Symbiotic Entity feature that you quoted doesn't completely match either the Unearthed Arcana version of the Circle of Spores or the later published Guildmaster's Guide to Ravnica version, although it is very similar to both.

Here's the version from Unearthed Arcana: Three Subclasses, where it first appeared:

At 2nd level, you gain the ability to channel magic into the spores that infuse you.

When you use your Wild Shape feature, you can awaken those spores, rather than transforming. When you do so, you gain 3 temporary hit points per level you have in this class, the damage of your Halo of Spores feature doubles, and your melee weapon attacks deal an extra 1d6 poison damage to any target they hit. These benefits last for 10 minutes or until you use your Wild Shape again.

And here's the Guildmaster's Guide to Ravnica version (this is fair use):

At 2nd level, you gain the ability to channel magic into your spores. As an action, you can expend a use of your Wild Shape feature to awaken those spores, rather than transforming into a beast form, and you gain 4 temporary hit points for each level you have in this class. While this feature is active, you gain the following benefits:

• When you deal your Halo of Spores damage, roll the damage die a second time and add it to the total.

• Your melee weapon attacks deal an extra ld6 poison damage to any target they hit.

These benefits last for 10 minutes, until you lose all these temporary hit points, or until you use your Wild Shape again.

So you might want to check the source you got your quote from to make sure you have accurate versions of this and other subclass features you use. Your quote looks like it was made by someone updating the UA version with the changes in the Ravnica version without quite matching the wording, and that could be problematic if changes were overlooked anywhere else in the subclass.

Regardless, the same key wording ("rather than transforming") is used in your quote, in the UA version and in the Ravnica version, so this answer is effectively universal. You might want to check the source you got your quote from, however, to make sure you have accurate versions of all your subclass features.

Yes, you ignore the downsides.

If you use your Wild Shape feature to do something else "rather than transforming" then you are literally not transformed after that, opting for another benefit in its place, in this case awakening your spores. Thus any restrictions you would normally be subjected to "while you are transformed" would literally not apply.

Note the following wording in the druid's Wild Shape feature (emphasis mine):

While you are transformed, the following rules apply:

This precedes the list of benefits and restrictions you are subjected to when you are in a beast form, including the restriction of being unable to cast spells. These would not apply unless you're actually transformed.

If they were intended to apply just because you used the Wild Shape feature even if it didn't involve transforming, then it would say "while using this feature" or "while benefiting from this feature" rather than "while you are transformed." (And the designers would have been unreasonable to publish the Circle of Spores with the wording used if there were such an ambiguity.)

Effectively, this allows the Circle of Spores feature to utilize your Wild Shape uses as an expendable resource without creating a new resource just for that purpose (the Ravnica version of the feature makes this explicit) and without stacking the benefits of awakening your spores on top of the benefits of being in beast form.