Why can I not have space around an argument to IfValueTF unless inside ExplSyntaxOn...ExplSyntaxOff?

This is similar to a previous question (Spaces around Boolean argument to IfValueT gives -NoValue-) but the answer to that one involved a math mode character and its catcode, whereas in this question there is no such issue.

Consider this MWE:

documentclass{article}
usepackage{xparse}

ExplSyntaxOn
NewDocumentCommand{testing}{ o }
  {%
    IfValueTF{ #1 }
    {#1}
    {false}
  }%
ExplSyntaxOff

begin{document}
testing
end{document}

Without the ExplSyntaxOn...ExplSyntaxOff and without any spaces around #1 in IfValueTF{#1} I get the expected result (false). However, if I put spaces around the argument IfValueTF{ #1 } I get -NoValue-, unless I also turn on ExplSyntaxOn...ExplSyntaxOff. This can’t be a mathmode issue or catcode issue like before, at least if it is I don’t understand it. Also, if I make the argument to testing mandatory rather than optional, this doesn’t happen, but I still don’t get false when I expect to. What is going on in this situation? I know NewDocumentCommand doesn’t require xparse but should I included it anyway and put all my definitions inside ExplSyntaxOn...ExplSyntaxOff?