According to RFC 5322, spaces in email addresses are invalid. RFCs set standards and are not law, however currently Hotmail takes this very seriously and has a zero-tolerance policy when it comes to email addresses with spaces.
Emails sent with a from address with spaces e.g. space email@example.com to any Hotmail address will bounce. To ensure these emails deliver to Hotmail addresses, you must either add in an underscore e.g. firstname.lastname@example.org or remove the space e.g. email@example.com.