Spacing Between Capital Letters

Question

Many typographic and latex enthusiasts recommend using increased letterspacing between capital letters. For example, in Practical Typography, Matthew Butterick recommends 5--12% increased spacing and R Schlicht, author of the microtype package also recommends more spacing between capital letters.
https://practicaltypography.com/letterspacing.html
https://ctan.org/pkg/microtype (see documentation, see letterspacing)
My question is:
Does the increased letterspacing apply (a) only between the capital letters themselves or (b) does it also apply to the space between the capital letters?
I unfortunately haven't found this discussed elsewhere. I hope this the right place for this question. I provide a MWE example below, where I give examples of both cases:
EDIT: Fixed the MWE for easier comparison.

\documentclass[12pt]{article}
\usepackage{stix2}
\usepackage[letterpaper,lmargin=1in,rmargin=1in,tmargin=1in,bmargin=1in]{geometry}%I understand that these margins are not typographically optimal
\raggedright%makes it easier to observe spacing
\usepackage{letterspace}
\newcommand{\letterspacing}{200}%units: thousandths of an em, I use an exaggerated letterspacing amount to make the letterspacing difference more visible to the reader.
\begin{document}
\textbf{The first sentence has extra space between capital letters, including spaces.}\par
\textbf{The second sentence has extra space between capital letters, excluding spaces.}\par
\textls[\letterspacing]{WE THE PEOPLE OF THE UNITED STATES}\par
\textls[\letterspacing]{WE}%
    ~\textls[\letterspacing]{THE}%
    ~\textls[\letterspacing]{PEOPLE}%
    ~\textls[\letterspacing]{OF}%
    ~\textls[\letterspacing]{THE}%
    ~\textls[\letterspacing]{UNITED}%
    ~\textls[\letterspacing]{STATES}\par
\textls[\letterspacing]{HE HAS WAGED CRUEL WAR AGAINST HUMAN NATURE}\par
\textls[\letterspacing]{HE}%
    ~\textls[\letterspacing]{HAS}%
    ~\textls[\letterspacing]{WAGED}%
    ~\textls[\letterspacing]{CRUEL}%
    ~\textls[\letterspacing]{WAR}%
    ~\textls[\letterspacing]{AGAINST}%
    ~\textls[\letterspacing]{HUMAN}%
    ~\textls[\letterspacing]{NATURE}\par%
\textls[\letterspacing]{WE HE SHE THEY THEIR YOU ME US HIM HER THEM IT}\par
\textls[\letterspacing]{WE}%
    ~\textls[\letterspacing]{HE}%
    ~\textls[\letterspacing]{SHE}%
    ~\textls[\letterspacing]{THEY}%
    ~\textls[\letterspacing]{THEIR}%
    ~\textls[\letterspacing]{YOU}%
    ~\textls[\letterspacing]{ME}%
    ~\textls[\letterspacing]{US}%
    ~\textls[\letterspacing]{HIM}%
    ~\textls[\letterspacing]{HER}%
    ~\textls[\letterspacing]{THEM}%
    ~\textls[\letterspacing]{IT}%
\end{document}

Answer 1

There is a bit of fetishization of the default letterspacing among LaTeX folks, I think largely because historically it’s been difficult to do properly in LaTeX. But yes, all-caps setting does definitely benefit from extra spacing. If I remember right, Jan Tschichold’s description of how to do this properly is in his Treasury of Alphabets and Lettering, although it might have (also) been in The Form of the Book, although the Hartley and Marks edition is long out of print and has ridiculously high prices on Amazon. You don’t want to put too much spacing in, as it would tend to make the inter-word spaces start to vanish, although I would be inclined to accept larger inter-word spaces in an all-caps setting than I would in lowercase (TeX's defaults, I would add, are heavily influenced by 19th-century practices which had larger spaces than became acceptable to the Golden-age typographers beginning with William Morris and running through Tschichold. These latter, turning to incanabular practices as their inspiration (Aldus Manutius and William Caxton, among others being their lodestones), preferred a smaller standard space of between ⅕ and ¼ of an em and no extra space at the ends of sentences. In contrast, TeX's default word space is ⅓ of an em, and extra space is added at the end of the sentence. Nineteenth century hand compositors were paid by the line and as spaces were an easy way to boost their line count without significantly boosting their labor, spacing tended to get quite wide in that era.)

Answer 2

Thank you for the image examples.

Your question is basically about typography not LaTeX. A more LaTeX orientated question would be how to reproduce a typographic desire.

I prefer no extra space in the spaces between the capital letters (your second sentences). The extra space between the words (your first sentences) makes the sentence look a bit disjointed. Of course opinions may vary.

The designer of a font specifies the spacing between characters. Changing this should be thought about very carefully. If you do it the assumption maybe that you think you know better than the creator. There can be special circumstances where altering the font characteristics may be justified. If so it might be better to open a conversation with the font creator.

--- GOM