The BAT construct FOR %%I in (%~dp0\somefile.txt) will fail if the current directory has a space in the fully qualified path. It will interpret the path as a list of space-separated paths instead. The usual solution, to put the path in quotes, will not work in this context since FOR treats a quoted string as a literal line to be processed instead of as a single filename.
The workaround is to use %~dps0 instead of %~dp0. Thus, short 8.3 filenames will be used instead, eliminating the problem.