In #25204 (closed), it was noted that GHC didn't properly deal with having spaces in its executable path, as it would compute an invalid path for the C compiler.
The original fix in 31bf85ee used a trick: escape spaces before splitting up flags into a list. This fixed the behaviour with extra flags (e.g. -I), but forgot to also unescape for non-flags, e.g. for an executable path (such as the C compiler).
This commit rectifies this oversight by consistently unescaping the spaces that were introduced in order to split up argument lists.