SQL Server Configuration File and InstanceName parameter
Will /InstanceName=&quot;TestSQLServer&quot; parameter override what we have in
the configuration file (/InstanceName = MSSQLSERVER (default
instance)), and install SQL Server as a named instance &quot;TestSQLServer&quot;
?

Yes, per the below excerpt from the configuration file documentation :

The configuration file overwrites the defaults in a package

Command-line values overwrite the values in the configuration file