Let $X$ be a topological space, and $C, U \subset X$. Let $\overline{A}(X)$ denote closure of $A$ in $X$. Does it hold that
$(1) \quad \overline{C \cap U}(U) = \overline{C}(X) \cap U$?
Background
It can be shown that
$(2) \quad \overline{C \cap U}(U) = \overline{C \cap U}(X) \cap U$,
When $C \subset U$, $(1)$ is shown to hold by $(2)$. Otherwise, since closure is increasing, from $(2)$ we have
$(3) \quad \overline{C \cap U}(U) \subset \overline{C}(X) \cap U$.
So the question could also be whether the superset relation holds.
Edit: $(1)$ also holds when $U$ is open in $X$; see my answer below.