You can take cues for presenting your information hierarchy from the four key components of any IA—
Organization Scheme and Structure
Does the information hierarchy match your users' mental model?
Is the terminology appropriate for your target audience?
Can people find where they are and their way around your UI?
Do people know how to find what they're looking for in your UI?
As long as your UI has these four things appropriately catered to, it won't matter whether you use spaces or dashes, or any other approach, for that matter. The visual aspect is a subject of personal preference.
And this is precisely why there are so many different ways to represent directory structures within Finder on Mac and Explorer on Windows, just to name the two most commonly used operating systems. For that matter, even cloud applications such as Google Drive would offer you multiple options to choose from when navigating through your Drive's information hierarchy.