Will this high number of low-altitude satellites cause a tracking and collision nightmare for the world's space agencies? Sorry, I recently finished "Seveneves" and I have space debris anxiety right now.
Dead satellites and debris in low altitude orbits will experience orbital decay and burn up in the atmosphere within a few years. High-altitude objects (e.g, at GEO) are more of a concern.
In GEO everything is going in the same direction at the same speed so there's really no danger of collision. It's all the satellites whizzing over Earth's pole in different directions that have resulted on the only accidental collision.
Only if poorly managed. It's 4000 objects in an area greater than the surface of the Earth - so still very sparse. And they're low enough to deorbit from drag in 7 years, so if something did get lost or blow up, it would fix itself naturally.