Well it's simple, if you play legit, you won't get Banned by Overwatch or VAC.
If you play obvious, you still won't get banned by VAC but you can get banned by Overwatch.
So, no VAC doesn't detect the cheat.

Edit: I talked about CS:GO, i don't know if this was the Game u were talking about, but still the Game Anticheat doesn't detect the cheat