Yes, U+0305 COMBINING OVERLINE should cause an overline placed above the preceding character. However, there are several reasons why this may fail more or less. First, placement of combining characters requires a good rendering engine (e.g., the overline must be placed higher if the preceding character is capital X). Second, the font being used may lack U+0305. This may or may not cause a fallback font to be used, possibly a font that is not stylistically similar to the basic font. Third, U+0305 was not really designed for use as a vinculum in conjunction with a square root sign, so it may look misplaced, depending on font.
In plain text, it is usually best to avoid trying to produce “smart” square root expressions with a vinculum. Using just √x or (is x is an expression with operators) √(x) is much safer and in full conformance to the mathematics standard ISO 80000-2.