Let's start off looking at this from a conservation of angular momentum point of view. We can say that angular momentum is definitely conserved here because there is no external torque being applied to the system.
I'm not sure that orbital energy is conserved here since it really seems like whatever motors are pulling the cables tighter will need to do work to do that which allows energy to be transferred from batteries/solar into orbital energy (so total energy is obviously conserved it's just that we'd also have to account for other energy sources besides orbital energy).
Let's say the station starts off orbiting at a radius of $R_0$ in a "neutral" circular orbit (i.e. station occupants feel weightless). This gives us an orbital velocity of $v_0 = \sqrt{\frac{\mu}{R_0}}$ where $\mu$ is the gravitational parameter of the central body.
Our specific angular momentum is then just:
$R_0 v_0 = \sqrt{R_0 \mu}$
Now, let's say you reel in on those cables and bring the whole radius down to $R_f$. Since angular momentum is conserved we have $R_0 v_0 = \sqrt{R_0 \mu} = R_f v_f$. We can solve this for $v_f$:
$v_f = \frac{\sqrt{R_0\mu}}{R_f} = \sqrt{\frac{R_0\mu}{R_f^2}}$
To answer your original question we need to determine if this is slower or faster than the circular orbit velocity at $R_f$:
$v_{f,circular} = \sqrt{\frac{\mu}{R_f}}$
If we rearrange our expression for $v_f$ we get:
$v_f = \sqrt{\frac{R_0}{R_f}} \sqrt{\frac{\mu}{R_f}}$
Combining this with our equation for the circular velocity:
$v_f = \left(\sqrt{\frac{R_0}{R_f}}\right) v_{f,circular}$
So, if $R_0 > R_f$, the station ends up with a velocity that's greater than orbital velocity (since $\sqrt{\frac{R_0}{R_f}} > 1$). This is enough to show that you would in fact create artificial gravity by doing this.