Hmm. I'm running 21.3. Would you please try this experiment?
Use C-x C-f and type:
$USERPROFILE/My<space>
as if you were about to type "My Documents".
When I do that -- which is the way I usually navigate to "My
Documents" -- on typing the space character, I get a bonk and the
message "Text is read-only". Then it displays "C:\Documents and
Settings\me\My" -- WITHOUT a space. Even though by now I know to
expect the bonk and the spurious error message, I must type two
spaces: "My<space><space>Documents" to get where I'm going.
With respect, that behavior feels broken to me. Perhaps it could be
fixed without sacrificing the use of space as a completion character
-- but I always use TAB myself, so I'd gladly make that trade.