A topic from AEG's L5R CCG Rules forum, copied for Oracle of the Void from a copy of the forum saved in October 2015, so pages it didn't save are missing. Players' names are left out; the rules officials are named. Rulings are as they stood on these dates; later rulings, the rulebooks and the Rules Archive may differ.
A player, 4 June 2008
Isawa Zao
Reaction: After Zao performs a Spell or Kiho: Give Zao +2F or gain 2 Honor.
Is it possible for Zao to use his reaction after he performs a Spell or Kiho that requires that he bows as a cost (like Touch of Ice)?
It has been argued that he can because he can react because he's not bowed when the trigger for his reaction occurs. From here http://rules.l5r.com/Glossary_P-Q#Perform
"Perform" The timing point "after (a card) performs" an action is after the fact that the card's performing status is known; that is,
* after the action is announced, if the performing is from the card's own ability or that of an Item or Spell attached to it; * after the action targets the performer otherwise.
So as soon as you announce Zao is performing Touch of Ice, the "After Zao performs" trigger is met.
Brook Cunningham (rules official), 4 June 2008
Isawa Zao
Reaction: After Zao performs a Spell or Kiho: Give Zao +2F or gain 2 Honor.
Is it possible for Zao to use his reaction after he performs a Spell or Kiho that requires that he bows as a cost (like Touch of Ice)?
It has been argued that he can because he can react because he's not bowed when the trigger for his reaction occurs. From here http://rules.l5r.com/Glossary_P-Q#Perform
"Perform" The timing point "after (a card) performs" an action is after the fact that the card's performing status is known; that is,
* after the action is announced, if the performing is from the card's own ability or that of an Item or Spell attached to it; * after the action targets the performer otherwise.
So as soon as you announce Zao is performing Touch of Ice, the "After Zao performs" trigger is met.
Yes, Zao can react to performing a Spell that requires him bowing as a cost.
As you point out, the trigger for Zao's Reaction occurs before he would bow.