Why do generated passwords start/end with spaces?

When new passwords are generated for new users, some users are reporting that the passwords include spaces at the beginning and end of the passwords. Has anyone ran into this before or have any idea why this would be happening? What are the potential problems with this, and how can they be avoided?

If wp_generate_password() was called with the third parameter $extra_special_chars = true a space might be part of the password:

function wp_generate_password( $length = 12, $special_chars = true, $extra_special_chars = false ) {
    $chars="abcdefghijklmnopqrstuvwxyzABCDEFGHIJKLMNOPQRSTUVWXYZ0123456789";
    if ( $special_chars )
        $chars .= '!@#$%^&*()';
    if ( $extra_special_chars )
        $chars .= '-_ []{}<>~`+=,.;:/?|';

    $password = '';
    for ( $i = 0; $i < $length; $i++ ) {
        $password .= substr($chars, wp_rand(0, strlen($chars) - 1), 1);
    }

    // random_password filter was previously in random_password function which was deprecated
    return apply_filters('random_password', $password);
}

There are three other possibilities how spaces can find a way into passwords:

1. The email client applied some broken formatting to the message.
2. A plugin filters the password and adds the space.
3. A plugin defined the function before WP did it (it is a pluggable function) and allowed spaces.

Search all installed plugins for password. Ask your users what email client they are using. To prevent spaces before or after WP generated passwords add a filter:

add_filter( 'random_password', 'trim' );

Note that WordPress does not send passwords with spaces to users by default. There is probably some other code involved.