I mean when backup command is issued to database, does backup process read all data pages from disk or use in memory pages?
By "in memory", I assume you are referring to cached data and index blocks.
mysqldump issues a bunch of
SELECTs, which use the caching that is available to any other
SELECTs. Since it does not dump the indexes, most cached index blocks do not help the the dump process.
Xtrabackup has some extra hooks into InnoDB to help achieve a 'consistent' dump in a less intrusive way. But still the caching is in effect.