Test shoots aren't anything fancy, it's just a term for a photoshoot that's done for free to help build a portfolio. If that definition is enough for you, that's great but chances are you might have more questions.
A photographer can do test shoots on their own with anyone as their subject. But photographers, stylists, and models can also team up for free (usually) to create work for everyone's portfolios. Here I'll be speaking specifically about photographers.
Photographers aren't just giving away shoots for free. Test shoots are meant to build and benefit their portfolios in a few ways. Some test shoots are to take the type of photos a photographer wants to be paid for. This is because without a portfolio to show what you can do, it's not easy to book clients. Others are to get comfortable with new gear or styles of photography before you start charging for it. The key takeaway is that test shoots are for building portfolios so the photographer (and their team) get more creative and conceptual say in a shoot.
No, not at all! Since test shoots are portfolio builders the photographer will still want to do quality work as if they are being paid. The difference is that the photographer may have to retake a few shots to figure things out (which is normal in any shoot) and they may have more say in the type of shots they take. Try thinking of it this way, test shoots are just pretend/practice paid shoots.
I hope this helps you understand test shoots a little better. If you have more questions feel free to email me.