The test is more of a teaching tool than an assessment tool. Students can work together and learn in the process. Grading tends to be tedious and more difficult because of the amount of student writing and the larger scope for partial answers and partial credit. This is the standard sort of test. The learning effect comes from preparing for the test, not from taking it.
Tests tend to be short and easy to grade.
Students tend to dislike this kind of test because it makes their proper preparation more crucial. Allowing open books and notes makes it possible to ask more sophisticated, and therefore more instructive, questions. Students tend to like this format since it allows them to think of their books and notes as a crutch. But actually at least some of the questions on the test are likely to be harder than in a closed books and notes test, and students sometimes waste significant amounts of time searching their materials for items that they actually could think of immediately if only they tried. Grading is similar to closed books tests.