In the dialog box for Text, the following is displayed: "The Replace list shows words and phrases you want to replace...". "phrases" implies words separated by spaces!
If you attempt to include a space in the Replace column, you get the error "Shortcuts cannot contain spaces". This isn't a Shortcut -- Shortcuts are in the next tab all by themselves. This is text replacement, and should do what its own dialog says it will do. Clearly a BUG. (BTW, I tried using %20 for a space, but that doesn't work either.)
Having this work right is important for context-sensitive misspelling correction, e.g., replacing "complementary close" with "complimentary close" only when those words are adjacent. (Dictation's inability to use the right complimentary/complementary in context is the source of the problem.)