No, it will not be overwritten as he has already a database with test data. Using Mendix its default database, HSQL, the data is stored in the deployment folder. As long as your colleague does not remove his deployment folder, he will keep his data although you added a snapshot of your data. The snapshot data is stored in the main folder of the project as "data-snapshot.zip" and will only be used when the database does not exist: either a new developer/pc, or a cleaned deployment folder.
Yes, it will be overwritten. If he wants to keep his own dataset he should copy it and put it back after he updates the project. But I think it would be better to use postgres instead of the build in database. Postgres is a bit more robust then the build in database.
[EDIT] I could be wrong here but to my knowledge it would be overwritten, but maybe this has changed over the years. The only way to find it out is copy the database just to be sure and test it and let us know the answer. You are still better off with Postgres though.