I don't know how it works when you are using physics, but C2 definitely has it's own internal collision system that has nothing to do with Box2D.
Basically, the way I understand it, the collision system takes the following 'top down' approach:
1. Only compare an object against other objects in it's current collision cell(s).
2. Start by doing a cheap boundary box test to see if the BB of ObjA is intersecting the BB of ObjB.
3. If so, do a more expensive polygonal collision test, where the engine checks if the polygons of the two objects intersect anywhere.
4. If physics are involved, I'm guessing that the poly test is handed off to the Box2D behavior, which tests for collisions using it's own internal algorithms. But...I could be wrong about that.