It does. Named a git repos "foo%20" and cloned it:
```
2.0.0-p0 ~ git clone "file:///Users/jeremy/foo%20" baz
Cloning into 'baz'...
fatal: '/Users/jeremy/foo ' does not appear to be a git repository
fatal: Could not read from remote repository.

Please make sure you have the correct access rights
and the repository exists.
```

Whereas using a plain path works:
```
2.0.0-p0 ~ git clone "/Users/jeremy/foo%20" baz
Cloning into 'baz'...
done.
```