Partly. It mostly works well for the things I use it (push messages, maps, exposure notifications seem to work too). Some apps behave a bit weirdly if the try to access specific API's, like Google Pay. So it definitely isn't fully functional, but works well enough for many use cases. There is also a LineageOS+microG fork, which makes trying it out a lot easier.

The way it works is that it pretends to be Google Play Services, so it isn't transparent to the apps. Not sure if the apps could figure it out it isn't running on the real deal.