If a wall that is no boundary object intersects with a wall that is a boundary object, and they are in the same cleanup group, the wall that is a boundary object is considered to be not a boundary object because of its cleanup with the other wall. As a result, no space can be generated even if the geometry would otherwise be closed. In that case, you need to create a new cleanup group and place only the walls that are no boundary objects in that group.
When you generate associative spaces, only boundary objects visible in the drawing area at the time you start the space generation tool are included in the selection set. If you have zoomed or panned before generating spaces, the space detection is not automatically updated to the new drawing area. To update the selection set, use the v (reset Visible boundaries) option on the command line. This option will update the drawing area to its current extents. Then, generate the space again.