Epic's UT2004 webadmin interface contains an unfortunate bug that changes any space character (ASCII code 32) to a non-breaking space (ASCII code 160, HTML entity " ") by default. You probably wouldn't have to care if NBSPs weren't invisible in the game.
This server actor fixes the problem by adding a special character coding entry that replaces any received NBSPs with regular spaces. This way the server name and any other text settings will correctly use spaces instead of NBSPs.
Note that this fix makes it impossible to intentionally enter NBSPs via the webadmin interface!
Simply extract the content of the ZIP file to your UT2004 server's System directory. This is an unconfigurable serverside-only ServerActor, so don't attempt to add it to the ServerPackages or mutators list.
To enable the fix, add the following line to the [Engine.GameEngine] section of your server's main INI file (usually UT2004.ini or server.ini):
That's all. Restart your server and enjoy your server name keeping its spaces even after e.g. just changing the server password.
I didn't specifically test it, but this fix should also work in UT2003 without modifications.