Yes, half-character spacing is a feature found on a number of typewriters. Some manufacturers such as Olympia had the feature built into the regular space bar instead of adding a special key (spacing instead of backspacing). The half space is predominantly used for corrections, and it allows you to insert in a missed letter by compacting the word before or after the mistake. On the 1840 it would appear that the this is linked to the backspace key and that resolving the issue with it will solve both keys' functionality.