Short answer. It only releases the pledge, not the underlying debt. Civil Code Article 936 states that a legacy to the debtor of the thing he pledged is understood to discharge only the right of pledge. You get the pledged item back free of the security interest, but you still owe the debt itself.
What the law says
The legacy to the debtor of the thing pledged by him is understood to discharge only the right of pledge.
Civil Code, Article 936 — When Such a Legacy Lapses. Read the full provision →
Why the legacy is read narrowly
Article 936 draws a careful line between the pledged item and the debt it secures. A pledge is a security arrangement: you handed over an item to your father as collateral, but the item itself was never the debt, it merely guaranteed that the debt would be paid. When your father left you that same item as a legacy, the law's default reading is narrow: the legacy to the debtor of the thing pledged by him is understood to discharge only the right of pledge. The legacy is treated as returning the collateral, not as forgiving what the collateral secured.
What stays intact
Because only the pledge is discharged, your obligation to pay the underlying debt continues to exist after the legacy takes effect. The estate, standing in your father's place as creditor, can still pursue payment of that debt from you, only now without the pledged item as security. Practically, this means you receive the item back unencumbered, free to keep, sell, or use as you wish, but the debt itself is a separate account that the will's language here does not touch.
How this differs from the article that comes before it
This narrow reading exists precisely because the Civil Code treats an outright legacy of the debt itself as a distinct, more generous kind of bequest, one that does cancel what is owed, at least up to the time of the testator's death. Article 936 is the qualification that applies specifically when what was left is described as the thing pledged, rather than the credit or debt. If the will's wording is ambiguous about which of these two situations applies, that is exactly the kind of question where the precise language of the will, not a general assumption either way, decides the outcome.
A separate rule on when a debt legacy lapses entirely
The same article also addresses a different situation that is worth knowing about even though it does not change the outcome here: a legacy of a debt shall lapse if the testator, after having made it, should bring an action against the debtor for the payment of his debt, even if such payment should not have been effected at the time of his death. That lapse rule is about a testator later suing to collect on the debt, which is treated as revoking the intent to forgive it. Nothing in your facts suggests your father sued you for payment, so this lapse concern would not come into play for the pledge legacy you received.