Symptoms

When designing an email and using the "Link to Item" which comes from the Item Reference created automatically by SharePoint, the actual link displayed in an email at runtime can sometimes be broken IF the name of the site the workflow resides within has spaces in it.

The hyperlink created by K2 for "Link to Item" inherits the name of the app and because there's a space, the space breaks up the hyperlink and does not contain all of the desired information. 

Diagnoses

This is related to how the hyperlink inline function works and is not considered a bug, but designed behavior. The Inline function is not designed to handle spaces in a URL, nor is a URL supposed to contain spaces. 

Resolution 

When dropping in the hyperlink inline function the tag is added to the text specified within HTML so that any text within the tag will have the hyperlink text decoration, hence the non-broken link, and will also have the functionality to allow the user to navigate to the desired URL.

However, note that when you click on the hyperlink, which the spaces have been replaced with a '%' sign along with two hexadecimal digits. This is due to the fact that the URL needs to be converted into an applicable ASCII format that will allow the URL to be sent over the internet. In essence when using the 'Link to Item' item reference there is no formatting bound to that text hence the URL breaking where the space is, because technically speaking spaces are not allowed in a URL.

A feature request was submitted for this item: 

Feature 571927: Feature - CSOM and SPV2 Add tag when 'Link to Item' Item Reference is Referenced in Email Body

This feature is to essentially add the tag to the 'Link to Item' property whenever that property is dropped within the body of an email because that property is always going to be a URL, and a lot of the time spaces may be present in the SharePoint libraries, hence adding the tag with the contents of the property would be more user friendly and efficient.