I think this should generate two spaces between "foo" and "bar".One in 10pt, the other 15pt, or 2 spaces of 20pt?
Yeah, I deliberately avoided this part of the answer...
So, it would depend on the space-specifiers, which are in this case unspecified (no borders, no padding, only background --hmm, should that have an influence? the font-size would IMHO only have an effect in the bp direction, depending on the alignment-baseline) So defaults to 0pt (not being inherited by default)
The space constraints probably (hopefully )only applies to space specifiers on the FOs itself, i.e if I had written <fo:inline space-end="2pt">... Space characters ought to be another matter.
That's really a dilemma: you can get rid of most control characters with FO markup, especially VT, LF and all that, but there is no way to get rid of spaces. Because of text-align="justify". Unless leader expansion is better defined.