1) Space debris. This is proposal is several orders of magnitude larger than the biggest things in near-Earth orbits. Thus equally many orders more likely to be hit by, and create, space debris
2) Heat transport - this isn't my home turf, but I can't imagine building something lightweight enough to be launched, yet also capable of transferring enough heat away from the 5 GW core, without it melting/breaking
It's been a while since I read their whitepaper, but I don't recall either of those points being addressed.
Space is just unfathomably large. If you aren’t in the same orbital plane, you’re just not going to have a problem. And if you did, Kessler syndrome in LEO is a non problem.
Could be an issue for specific orbital planes in stable orbits, but even there, it’s overblown.