Yes, everything lives in RAM, that's the magic... it wouldn't be possible to take the card out of the running system, much less putting it all back onto the new card otherwise. I'm currently working on a spin-off that only resizes the FAT partition of an already cloned card.
In theory it would be possible to transfer the entire book collection as well (provided the new card is same size or larger than the old). However this would require you to swap the cards back and forth several times as you can only fit so much into RAM for each step of the way...
But you can copy those normally through USB so I don't think there's a point to take the idea that far.
