URLs do not allow space as a character present in a valid URL.

URLs for Internal/External links do not allow the space character.
If the value of the URL contains a space, validation fails and does not allow to add the URL.
If '%20' is used for space, the link is then converted to '%2520' which translates the Encoding twice.

<?php
function _block_titlelink_validate_url($url) {
  $text = $url;
  // These constants were heisted from the field_module.
  // Check if they exist
  if(!defined('LINK_EXTERNAL')) {
    define('LINK_EXTERNAL', 'external');
  }
  if(!defined('LINK_INTERNAL')) {
    define('LINK_INTERNAL', 'internal');
  }
  if(!defined('LINK_FRONT')) {
    define('LINK_FRONT', 'front');
  }
  if(!defined('LINK_EMAIL')) {
    define('LINK_EMAIL', 'email');
  }
  if(!defined('LINK_NEWS')) {
    define('LINK_NEWS', 'news');
  }
  if(!defined('LINK_DOMAINS')) {
    define('LINK_DOMAINS', 'aero|arpa|asia|biz|com|cat|coop|edu|gov|info|int|jobs|mil|museum|name|nato|net|org|pro|travel|mobi|local');
  }

  $LINK_ICHARS_DOMAIN = (string) html_entity_decode(implode("", array(
    "&#x00E6;", // æ
    "&#x00C6;", // Æ
    "&#x00F8;", // ø
    "&#x00D8;", // Ø
    "&#x00E5;", // å
    "&#x00C5;", // Å
    "&#x00E4;", // ä
    "&#x00C4;", // Ä
    "&#x00F6;", // ö
    "&#x00D6;", // Ö
    "&#x00FC;", // ü
    "&#x00DC;", // Ü
    "&#x00D1;", // Ñ
    "&#x00F1;", // ñ
  )), ENT_QUOTES, 'UTF-8');

  $LINK_ICHARS = $LINK_ICHARS_DOMAIN . (string) html_entity_decode(implode("", array(
    "&#x00DF;", // ß
  )), ENT_QUOTES, 'UTF-8');
  $allowed_protocols = variable_get('filter_allowed_protocols', array('http', 'https', 'ftp', 'news', 'nntp', 'telnet', 'mailto', 'irc', 'ssh', 'sftp', 'webcal'));

  $protocol = '(('. implode("|", $allowed_protocols) .'):\/\/)';
  $authentication = '(([a-z0-9%' . $LINK_ICHARS . ']+(:[a-z0-9%'. $LINK_ICHARS . '!]*)?)?@)';
  $domain = '(([a-z0-9' . $LINK_ICHARS_DOMAIN . ']([a-z0-9'. $LINK_ICHARS_DOMAIN . '\-_\[\]])*)(\.(([a-z0-9' . $LINK_ICHARS_DOMAIN . '\-_\[\]])+\.)*('. LINK_DOMAINS .'|[a-z]{2}))?)';
  $ipv4 = '([0-9]{1,3}(\.[0-9]{1,3}){3})';
  $ipv6 = '([0-9a-fA-F]{1,4}(\:[0-9a-fA-F]{1,4}){7})';
  $port = '(:([0-9]{1,5}))';

  // Pattern specific to external links.
  $external_pattern = '/^'. $protocol .'?'. $authentication .'?('. $domain .'|'. $ipv4 .'|'. $ipv6 .' |localhost)'. $port .'?';

  // Pattern specific to internal links.
  $internal_pattern = "/^([a-z0-9". $LINK_ICHARS ."_\-+\[\]]+)";
  $internal_pattern_file = "/^([a-z0-9". $LINK_ICHARS ."_\-+\[\]\.]+)$/i";

  $directories = "(\/[a-z0-9". $LINK_ICHARS ."_\-\.~+%=& ,$'!():;*@\[\]]*)*";
  // Yes, four backslashes == a single backslash.
  $query = "(\/?\?([?a-z0-9". $LINK_ICHARS ."+_|\-\.\/\\\\%=&,$'():;*@\[\]{} ]*))";
  $anchor = "(#[a-z0-9". $LINK_ICHARS ."_\-\.~+%=& ,$'():;*@\[\]\/\?]*)";

  // The rest of the path for a standard URL.
  $end = $directories .'?'. $query .'?'. $anchor .'?'.'$/i';

  $message_id = '[^@].*@'. $domain;
  $newsgroup_name = '([0-9a-z+-]*\.)*[0-9a-z+-]*';
  $news_pattern = '/^news:('. $newsgroup_name .'|'. $message_id .')$/i';

  $user = '[a-zA-Z0-9'. $LINK_ICHARS .'_\-\.\+\^!#\$%&*+\/\=\?\`\|\{\}~\'\[\]]+';
  $email_pattern = '/^mailto:'. $user .'@'.'('. $domain .'|'. $ipv4 .'|'. $ipv6 .'|localhost)'. $query .'?$/';

  if (strpos($text, '<front>') === 0) {
    return LINK_FRONT;
  }
  if (in_array('mailto', $allowed_protocols) && preg_match($email_pattern, $text)) {
    return LINK_EMAIL;
  }
  if (in_array('news', $allowed_protocols) && preg_match($news_pattern, $text)) {
    return LINK_NEWS;
  }
  if (preg_match($internal_pattern . $end, $text)) {
    return LINK_INTERNAL;
  }
  if (preg_match($external_pattern . $end, $text)) {
    return LINK_EXTERNAL;
  }
  if (preg_match($internal_pattern_file, $text)) {
    return LINK_INTERNAL;
  }

  return FALSE;
}
?>

Line 264: Added Space between "& ,$"
$directories = "(\/[a-z0-9". $LINK_ICHARS ."_\-\.~+%=& ,$'!():;*@\[\]]*)*";
Line 267: Added Space between "& ,$"
$anchor = "(#[a-z0-9". $LINK_ICHARS ."_\-\.~+%=& ,$'():;*@\[\]\/\?]*)";