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User A who is the TimeSheet approver for User B who is assigned both Project & Billing and Time & Attendance , but user A is only assigned Time & Attendance license. Would the TimeSheet be system approved in this sort of  scenarios?

No,  Timesheets would not be system approved if the User and Approver do not  have the same set of license seats assigned.
But the approver would be restricted to data related to the license seat assigned to him while approving the TimeSheet.
In the above scenario, the TimeSheet would not be system approved.
User A who is the approver would be still be able to view and approve data related to Time & Attendance  but would not be able to view and approve any project related data.