I know a Mom who is freaking out because her 2 kids live with her Ex in a 1 Bedroom apartment where he has the bedroom and the kids sleep in an elongated Closet. He took out the wall between a coat closet and a storage area so they have like a Tunnel to sleep in. She wants to call CPS but she's afraid to look like a fool. Before anyone freaks out, she didn't Lose custody of them, she lost her job and asked him to take them until she had a stable Job and Housing again and he filed for custody within a week

They don't even have to have their own room, they could sleep on a air mattress in the front room. It appears he has made a separte area for them and I see no reason this is a issue at all.

She should have fought custody in court or just keep the children, ( being poor is not a reason to give gives up)

This is also not "house hunters" TV show trying to decide if it is legally a bed room or not, to advertise it for sale.
He appears to be providing the best he can, and all they do is sleep there,and have other space to play. I would say it is pointless to call CPS unless he is not taking care of them properly and/or he has them in some danger

I agree with Fr_Chuck.
I think she would look like a fool, and what was she expecting anyway? She had to know the size of his apartment.
Why bite the hand that is feeding their children.
And he probably filed for custody so that he didn't have to support them doubly - paying her while also feeding, clothing, housing, and transporting them.
She needs to calm down, and be reasonable, and work things out.