I use "space simulation" because SC only wants to "feel" realistic. If you have a better term, I don't have one...
"Arcade game" don't fit in too.
I sort of like "simcade" personally. And yes, that applies to ED too imho, considering the amount of compromises (speed limit, blue zone, gimped yaw).
The "simulation" term has drifted over the years. It used to be that anything with a cockpit view would be called a simulation, so all those jet fighters arcade combat games would be called as such. These days, there's still a school of thought along those lines, but my impression is that the realism bar has generally been put higher and that a cockpit and keyboard shortcuts for subsystems is no longer sufficient if the game doesn't simulate "enough" of reality/physics.
Typically, WC/WC2/X-Wing/TIE Fighter were called "space sims" in their days but are definitely simcade. They come with the trappings of sim games (cockpit, buttons, shortcuts...) but behind that, you have a 3d arcade game that obeys to imaginary laws of physics. In an era where DCS, XP11, MSFS2020 (well almost) exist for atmospheric flight and Orbiter, FE2/FFE, Kerbal, RogSys, CoaDE, SE exist for space, those old "sims" stand out as something different, and so do ED, SC and others (Everspace to name one that I love and is not a sim either). Just like Need for Speed or Burnout are racing games but not racing sims.
The debate gets even more complicated when semantics come into it as there's an argument that what one game "simulates" doesn't have to be reality, hence X-Wing being a proper simulation of flying a spaceship in the Star Wars universe. While I agree with the premise that you can perfectly simulate something that doesn't exist, I'd only call the result a 'sim' if the imaginary part is embedded in an attempt at modeling reality. For X-Wing, well, that's never going to work: Star Wars and physics simply don't mix, too many issues. But take Kerbal for example, while the characters are obviously imaginary and the system isn't a 1:1 copy of the solar system, the imaginary part fits in a pretty good canvas of orbital physics. CoaDE is one of the most fascinating to me in that regards, as it doesn't simulate anything real, but anticipates space combat based on known physics and technologies.
Finally, there's also a more recent term called "immersive sim" which has nothing to do with physics or reality, but more with the game design making you feel like you are the main character. That sorts of merges with realism/physics though, as a lot of that identification comes from interacting with the environment and having it react as you'd expect it too: a set of rules that are consistent and can be observed/understood/abused. I'd say SC could fit in here actually due to its focus on that first person view and (relative) lack of magical transition, provided that they iron out a lot of the jankiness. It's lovely static, but when people start moving, it doesn't feel terribly immersive anymore. That could be fixed obviously. Whether it's likely to be is another debate...
Anyhow, I'm turning into MTB now, so I'll leave it there. I just feel the term "simulation" these days is both complicated and interesting.