The title card letters are 8x24, 16x24, or 24x24 px over a line backdrop, with the space being an empty 8x24 px void without any line. Here's AIZ2 in-game, HCZ1 in-game, and a photoshopped HCZ1 with a space. A hypothetical spaced "Hydro City" using untouched vanilla assets takes up a little less screen real-estate than the vanilla "Angel Island" already does, so they could've put a space if they really wanted to (though I wouldn't know how the real rendering code works, or if there would be any problems implementing this.) Just for fun, I also cut out the middle column of the "O" to make a quick-and-dirty smaller 16x24 letter that's more normal-sized. Here's some slightly cursed mockups for that.