That is because it never goes through mirc's script parser. That is the only time spaces are preserved, unless you are using binary variables. Changing the way mIRC handles spaces in scripts would break a lot of stuff in use today. Also, as others said, this topic has been beat to death. To add some spaces in, you could try using $chr(160) which in many fonts looks like a space, or:

Code:
alias spaces {
  return $str(  $+ $chr(32) ,$$1) 
}

Surrounding spaces with bold characters will preserve the spaces.

Abort, Retry, Fail?
www.liek.net