I agree that there wasn't thought put into it by the developers. I'm sure they weren't thinking, "hey Billy, sure we can put this 1 Billion C feat into a GBA game?" However, I do feel it's quite clear that the background very specifically resembles a star cluster, as opposed to Sonic's average space setting. If you'd really like to go all in on the argument of, "that's not what the developer intended", then you can of course, but please be prepared to nerf every single franchise's stats and feats on this website immediately afterwards.
Also, I can easily flip the card, and use this argument for myself. The background vividly resembles a star cluster, so that part can't be mistaken. What if the part the developers didn't think about wasn't the setting, but how they'd all end up back on Earth afterwards? Afterall, there are many instances of Sonic characters falling straight to Earth while in space, something that should essentially be impossible.