For TeX he has written a single large test called the TRIP test: described in "A torture test for TeX" (http://texdoc.net/pkg/tripman). This is a conformance test (to weed out bad reimplementations), written after TeX was written and debugged. (See https://texfaq.org/FAQ-triptrap for details.) Apart from this report there isn't a separate book about testing TeX specifically, though there is a TeX manual (The TeXbook, Volume A of Computers and Typesetting), the TeX source code as a book (Volume B, roughly equivalent to this: http://texdoc.net/pkg/tex), and there's also a nice paper called The Errors of TeX (https://yurichev.com/mirrors/knuth1989.pdf), supplemented by a changelog (http://texdoc.net/pkg/errorlog).

By "unit tests" Knuth is speaking of tests that each test just one part of the program in isolation, mocking out the rest, and also more broadly about the practice of "test-driven development" which has this as its prerequisite. He means he finds it simpler to just write the whole program up front, and test it wholesale.