Currently " " or space characters can not be included in the DN of the user for LDAP. According to support the following modification will fix this behavior:
change LDAP_AUTH_NEGOTIATE to LDAP_AUTH_SIMPLE
This change is not really supported, so I would like to see an option added to SDM to allow for this selection or to have the change explicitly made. EEM accepts space characters, and I would expect similar behavior among related products.