Utterly absurd. The Death Star is said to be the size of a moon, perhaps big enough to fit Tokyo on its surface 5 times over.
The whole of humanity can fit in an area the size of New York City. Add some fancy minituarized life support technology, and you can fit a billion easily in a relatively compact station.
The POPs in Stellaris are heavily implied to be 1 billion each, given how many tiles Earth could have.
Just because something can fit somewhere doesn't mean it will work. The logistics of having a billion beings in a space station would be staggering. Obviously logistics is not part of this game, but logic should be. Unless you have no other spaces left on your planets for people to live, a genuine overpopulation problem, why would any ruling empire build a moon sized station in space to hold billions of people? Unless that's what you're going for, a late game tech that will come into play once planets are filled up.