The entire point of this exercise appears to be this: Forth has one character you cannot redefine, the space, what happens if we remove that restriction?

The part of the bootstrap you're referring to is, in fact, the part where they tell the reader to treat space and newline as delimiters, so it appears you're complaining about whitespace being significant in the part of the program where they declare it to be a delimiter.

Such is your right, of course, but it does lead one to wonder if you had some better idea for how to go about this.

Those space characters are how it makes space actually a thing rather than just another character as it was beforehand.

I don't see how you could do that -without- a literal space being relevant in that way once.