Does hooking into a plugin action / filter override the plugin’s function for that hook?

It depends entirely on the specific plugin and the specific hook. It’s completely up to plugin developers what they want to allow other developers to do. They could allow developers to replace entire functions; to perform a custom action at the beginning, middle, or end of a function; to modify the result of a function; or none of the above. It’s impossible to give a generic answer.

The only way to know what you can do is to consult the developer documentation for the plugin, which will tell you what you can do. If that doesn’t exist, reading the actual code of the plugin and looking for hooks is all you can do.