When using Chatstep, I noticed when typing a room name, it automatically updates in the URL bar, plus spaces are allowed! You can even share the link with a space, and the recepient can join seamlessly. Here is an example of what I'm talking about: "https://chatstep.com/#this is a space test" (just copy and paste inside the quotations, SE is messing up the clickable link)
As I thought spaces in links were impossible, how is this possible?
URLs always need to be encoded if they contain any kind of special characters, including space. That is usually done with percent encoding, but for space characters the special encoding to a plus sign '+' can be used. (A literal '+' itself is a reserved character before encoding and would need to be encoded to '%2B'.)
However, modern browsers show some intelligence when dealing with URLs and can apply that encoding transparently when necessary. If you're on Firefox, try using Live HTTP Headers or Firebug to see the request actually sent to the server when you click that link.