I am not sure about Pali conventions but they may be similar to Sanskrit
romanization. In the case of Sanskrit, it is normal to insert a space after
all declensional and conjugational suffixes and also after enclitics and
other indeclinables, dividing up the text into separate words as far as
possible. The only problem here is when an external vowel sandhi has to be
broken -- scholars deal with this variously, either resolving the sandhi or
using apostrophes. Some scholars do not hyphenate compounds, but I prefer
to do this if potential readers are likely to be somewhat unfamiliar with
Sanskrit -- sometimes the compounds are enormous.
Many many learners (most of us ?) would perhaps be helped if some system
like that adopted by Michael Coulson in his Sanskrit primer were more widely
used -- he used several different separation marks (colons, semicolons etc)
to show the kind of compound involved. But again, the exact type of
compound involved is sometimes open to debate, as commentaries show.
I see a lot of Pali stuck together and I have wondered whether this is to
facilitate automated conversion to Asian scripts.