Would units in space interact with each other?

this. even if space is small in PA universe, it still is big. As long as there is no combat in space, there is no combat in space. this means, if uber does not implement space ships, rocket transports, should not have weapons either. The story reason could be "there is no metal spots in space, therefore the death machines called Commanders never saw a reason to fight in space. They always focused on planets, moons and asteroids."

Because science fiction, unlike fantasy, has roots in the real world in terms of how the universe works. It's "all the scientific rules we have" plus "except this rule does not apply" or "this rule is different" or "this rule is added".

I'd like to add that in good science fiction; once you have your rules, you follow them to their logical conclusion and let all the emergent behaviour and unforeseen consequences play out.