Question

Do the Pokemon / items in the hidden grottoes regenerate, If so, what time frame do they regen?

Answer 1

Yes, they do. 5% chance to regenerate every 256 steps.

From that 5%:

• 40% Item
• 40% Hidden item
• 20% Pokemon

Source

Answer 2

The contents of the Hidden Grottoes are random, and if they are empty, for each 256 steps, they have a 5% chance to regenerate, usually with different content than what was inside on the previous visit. Hidden Grottoes will not regenerate unless the items are obtained or the Pokémon are captured or defeated.

Yes. They can regenerate.

Source