In this case, the fix would have to be php side, because spaces do not belong in links at all, and the [wiki] tags do, quite plainly, links. What it needs to do is translate them to %20's (the proper way) or simply replace them with _'s (which will only work for wiki's and not any other application which would use a similar identifier setup).
Nevertheless, I've gone ahead and changed the {LOCAL_URL} identifiers to {SIMPLETEXT} identifiers - however, this is a hacky work-around.