When too many ships get close together, the action slows down in "time dilation" (they slow the game down because they cannot keep up in terms of CPU and probably bandwidth as well).
It's a smart design trick that made it possible for them to pull this game off much earlier than it should have been possible.
I'm not doing any of that time dilation and everything plays like an FPS game or action game, just with n=1000 players all the time because it's 2026 and I can send a lot of bandwidth.
Yes, I still have to work really hard to keep server CPU costs, client CPU costs and make all game code || and bandwidth down and optimize it, even to fit in this (seemingly high) bandwidth budget. But it's the right choice for an action game where time dilation is not an option, and all the action happens in one tight space, like in a Star Wars movie when there is a space battle.