Are you running ACP Planner 4.2.6? I don't have any older versions here (I'd have to revert my dev tree and build from the repository). I just tested this and I can't repro your experience. With Specify file name OFF it just saves the flat plan with the same name as the observing plan, with -flats appended, in the same folder, and with no path in the #dawnflats directive.

Flat Plan in ACP Planner

If this persists, I will need to see it myself.

Will a flat plan name containing spaces in the observing plan pose any problems for ACP?