Does the test function(s) vanish when imposing Dirichlet BCs with mixed finite elements?

The referenced text describes how the mathematical phrasing “vanishes” is handled for either \nu_u or \nu_v on an implementational level.
So yes, If you apply boundary conditions in a mixed space, DOLFINx will remove contributions from test-functions on those boundaries.

See for instance: Manually apply Dirichlet BC after assembly for mixed problem - #4 by dokken for an illustration