To answer my own question, the whitespace was being consumed because
of the adjacent <noinclude> and <includeonly> style tags. It appears
that there are two ways you could solve this:
1) use   to get a space that isn't encoded as ' '
2) use <nowiki/> after the space so that the other tags see the
adjacent nowiki tag and not whitespace that they gobble up.
I used #1 and my template expands as expected now.
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