Thinking about it a bit more, the code is presumably simply concatenating the artist data (from the tag) with the albumtitle (again from the tag), and then looking in the albumart subdirectory for a match, so the presence of hyphens shouldn't be a problem unless a conflict arises such as the example you suggested.
So far I haven't found any problems with 'non-conflict' cases, even when hypens appear within the artitst or albumtitle tags.