It leaves a lot to be desired.
The normal unit testing is advertised as supporting most of the Android class library (which is not the same as the standard Java class library), but what they don’t tell you is that it’s chock full of stub-out dummy logic. The routine to load an image from a file, for example, always returns a 100 by 100 black image. That’s sort of a deal-killer if one is trying to test image-processing code.
The instrumented testing runs on Android devices so avoids those headaches, but it too is extremely limited in scope and needlessly developer-hostile. For example, the test code is by default strictly disallowed from making any modifications to the filesystem. If one is testing an app that processes files, that again ends up being a deal-killer (how, exactly, am I to create the test files to feed to the app being tested)?
There are ways to disable this misfeature, but they are very poorly documented. It’s a setting buried deeply in an obscure settings menu somewhere. Where, exactly, is not standardized: it varies from device to device so much that one set of instructions is not even valid for a single Android OS release. I gave up in disgust after pissing away at least an hour searching in vain for it on my phone.
If Google wants developers to write good, comprehensive tests for apps, they need to stop making it as difficult as possible for us to do so. Until then, Google can take its pleading about writing tests and go fuck themselves. I will still write tests, but not very comprehensive ones.