My personal choice would be to always highlight spaces on currently selected items because a) a space is a part of a menu item or file name (otherwise, "Super Turrican" would be named "Superturrican") and b) the highlighting style in the second image looks just ugly to me.
Spaces within file names are highlighted ...
... but not within menu items:
This should be made consistent.
My personal choice would be to always highlight spaces on currently selected items because a) a space is a part of a menu item or file name (otherwise, "Super Turrican" would be named "Superturrican") and b) the highlighting style in the second image looks just ugly to me.