No, pillow shading is more akin to a consistent step in value increase toward a defined point, generally the middle/perceived center of mass of the shape when projected onto a 2 dimensional representatio.
I’m not a pro at pixel art, but the shading on his stomach isn’t what they call “pillow shading”?
It is not from the hat. It is from something off screen in the scene that isn't part of the image. The albedo of his skin is very high compared to clothing, as typical of the material.
Correct me if I'm wrong, but it seems like the intensity of shading doesn't seem to match up between his skin and his clothes. Plus the blue lighting, which, I'm assuming is emanating from his helmet, doesn't make sense to highlight the complete right side of his body if it's coming from above. Finally, if it's still true to be so that his lighting is from the hat, why doesn't his left side receive any light, or his belly?