Let’s do some math and see. If we assume the earth is a sphere (I know it isn’t, but it’s mostly close), and using 4(pi)r^2, it’s about 511 million km2 in area on the surface (counting oceans, etc). Double checking, it’s actually about 507 million km2, so decently close.
4 * 3.1459 * (6378^2)
Starlink is orbiting at 550km altitude (approx). At that altitude, we’re looking at…
4 * 3.1459 * (6928^2) = 603,977,365 km2
The thing to keep in mind about orbits is the defining factor is your eccentricity and velocity. Faster velocity == higher orbit, assuming it’s a round/circular orbit, that velocity will also be consistent.
As long as everyone is going
in the same direction and trying to maintain a circular orbit, you can stack orbits ‘on top’ of each other or put satellites quite close to each other just like planes do with flight levels. So even that number is misleading, as you could 10x that if you had decent traffic control.
Even without that, you’re talking a density of 1 satellite per 600 square kilometers of space with a million satellites for a given ‘flight level’.
The velocity matters a lot less than the relative velocity to other things you might be nearby - think of it like two cars going in lanes next to each other on the same ‘direction’ of a freeway, vs a free for all demolition derby with no traffic control, lanes, etc.
If everyone is co-ordinated you can have problem free high density. If random stuff is happening, including people potentially trying to hit you - it’s going to be a mess. If everyone just does whatever and never co-ordinates, yeah someone is eventually going to run into someone else - but unless there are a LOT of satellites, the odds are low.
With it being LEO, debris and dead satellites are also going to be a aerobraked pretty quickly.