How are several test cases in a ROS test node executed?

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Within a rostest file, each rostest node is run separately. That is, all of the parameters are set and the normal (test fixture) nodes are started, the first <test> node is run until it exits, all of test fixture nodes are stopped, parameters are cleared, and the process repeats for the next test node.

rostest doesn't know much about the test framework within your test node; all it knows is that it produces a junit-style XML file. Therefore, if you are using a framework like gtest or python's unittest framework, all of the tests in a single test node will run in the same environment without restarting nodes (and the state of those nodes and parameters will persist between tests). Similarly, test execution order within your test node will be determined by your test framework.