This simulates API responses, like a mocking mechanism, which is enough for some testing. But if you call RunInstances, the corresponding code of the launched instance doesn't actually run. So if you have orchestration code you want to test, that depends on actually running the instances you launch, this won't test it.
Spinifex (https://github.com/mulgadc/spinifex/) seems more promising than this, because its RunInstances actually launches VMs.