Nice. Probably the shortest solution.
$& means here a special character combinations to insert the whole match (which is an uppercased letter in out case). And of course we prepend each uppercased letter with a space

reviewing the code, it got a bit confusing, i will practice refactoring to apply the solution with recursion

Good and clear solution.
But I prefer not to mutate function arguments such as objects and arrays. It can lead to unexpected results outside the function. But for this kata it is OK.