PowerShell; although you have to use long form to do it:

    PS C:\> ${var with spaces} = 1

    PS C:\> Get-Variable *space*

    Name                           Value                                                                                                       
    ----                           -----                                                                                                       
    var with spaces                1                                                                                                           



    PS C:\> ${var with spaces} + 2
    3

In SQL, notably. Such identifiers need to be quoted, of course.

ISTR that many dynamic languages allow this with dynamic assignment features, but you often need to use similar dynamic access functiona rather than simple variable access to access them.

Ruby also allows whitespace if it is unicode but not ASCII whitespace, without use of dynamic assignment/access methods.

SQL allows spaces in object names but requires quoting, similar to shell.

No, it wouldn't; you'd just get EINVAL if you pass a filename containing "\x20" to open or other syscalls. If a application wants to use "\xC2\xA0" in a filename, it can do that, or it can not do that, same as currently. Same applies if it wants to use, say, "\xAA\xFF".