Question

In other words, does assertEquals works with a class that overrides equals

Answer 1

From the source code of the assertEquals method that you can find on the Junit GitHub Repo:

/**
 * Asserts that two objects are equal. If they are not
 * an AssertionFailedError is thrown with the given message.
 */
static public void assertEquals(String message, Object expected, Object actual) {
    if (expected == null && actual == null) {
        return;
    }
    if (expected != null && expected.equals(actual)) {
        return;
    }
    failNotEquals(message, expected, actual);
}

You can see that Junit is using the .equals() method.

Edit:

The code snippet is coming from a deprecated version of Junit.

You can read about the source of the ‘new’ Junit here. The idea is pretty much the same, the .equals() method is also used.