Do you mean M-SPC instead of C-SPC? And you're right, that a bug.
That's a relief, removing bugs in configuration which don't signal errors while using EXWM is a bit painful (if only .init could be stateless!). I did mean C-SPC though or whatever you have ‘set-mark-command’ bound to (I probably should have provided command names instead of bindings, since this Emacs).