Looks like asking for pain, even besides the one you’re seeing here:-) - think e.g. of a human trying to interpret (lists of) such group names when looking at the configuration. Typically you would assign an actual name (as in the natural-language meaning of the word), and put the description/definition elsewhere…
It should and it does - but by definition, the keys inside the {…} of paths that you pass to the CDB/MAAPI functions are space-separated, thus you need to quote key values that have embedded spaces in order to make the intended parsing possible. E.g. in your sample code, it should be:
args = "\"project:user-self(test project;oper;system)\"”
Side note: when you already have keys as confd_value_t and use the %x or %*x format specifiers, this quoting is done by the library, since it knows that it is dealing with a single value - but the argument for %s can be any string, including e.g. multiple space-separated keys. Thus another way to deal with the case that you have a key value that is a string with arbitrary contents (obviously zero-length strings, or strings containing ‘}’, will also require quoting) is to use CONFD_SET_STR() to turn it into a confd_value_t, and then in the path use %x with the confd_value_t instead of %s with the string.