GMail rocks!
GMail has fixed this bug.

In a nutshell, if you typed a subject line in an encoding other than plain latin1, GMail would add spaces every dozen or so characters. The same was with
"First LastName" <mail@gmail.com>. Now you can type your name in your language.

Some background on the issue:

A. RFC 2812 describes the Simple Mail Transfer Protocol.
In section 2.3.1, it mentions
``Although SMTP extensions (such as "8BITMIME" [20]) may relax this
restriction for the content body, the content headers are always
encoded using the US-ASCII repertoire. A MIME extension [23] defines
an algorithm for representing header values outside the US-ASCII
repertoire, while still encoding them using the US-ASCII repertoire.''
Source: http://ftp.rfc-editor.org/in-notes/rfc2821.txt

B. Reference [23] (from above) points to
``[23] Moore, K., "MIME (Multipurpose Internet Mail Extensions) Part
Three: Message Header Extensions for Non-ASCII Text", RFC 2047,
December 1996.''

C. RFC 2047 (from above) says in section 8 (Examples)
``(=?ISO-8859-1?Q?a?= (ab)
=?ISO-8859-1?Q?b?=)

Any amount of linear-space-white between 'encoded-word's,
even if it includes a CRLF followed by one or more SPACEs,
is ignored for the purposes of display.''

Therefore, there should be no spaces when two encoded chunks are
reassembled, even if there is whitespace (included CRLF) between them.

This bug was serious as threading was not carried out properly.

Thanks GMail for responding to the bug report.