Hello,
we've found out the root cause(s) of this issue and devised a fix.

A possible workaround is to manually correct parameters passed to the game. In the Launcher, go to Parameters page and on it is a text box labelled "Command line parameters". You have to add + sign before 'connect' and 'password' and enclose the password itself in double quotes.

E.g.:
The following parameters:

connect 127.0.0.1:2302 password 123 456

should be corrected to:

+connect 127.0.0.1:2302 +password "123 456"