Space characters are not allowed for Portfolio Item types. We should update our product not to allow them in the first place to be created.
The reason they're not allowed is because each portfolio item type generates a REST endpoint, which can then be interacted with using WSAPI. You can see these generated endpoint if you log into that workspace, then go to our WSAPI page, and look under the Object Model where you can find the endpoints of all this workspace's portfolio item types.
Our endpoints have unique URLs that allow interacting with them to create, read and update information. URLs will not allow space characters, see: https://stackoverflow.com/questions/497908/is-a-url-allowed-to-contain-a-space
This is the main reason that space characters are not allowed for portfolio item types.