Na página bash man, isso descreve como a divisão de palavras é feita de acordo com o conteúdo da variável IFS :
Word Splitting
The shell scans the results of parameter expansion, command substitution, and arithmetic expansion that did not occur within double quotes for word splitting.
The shell treats each character of
IFSas a delimiter, and splits the results of the other expansions into words using these characters as field terminators. IfIFSis unset, or its value is exactly<space><tab><newline>, the default, then sequences of<space>,<tab>, and<newline>at the beginning and end of the results of the previous expansions are ignored, and any sequence of IFS characters not at the beginning or end serves to delimit words. IfIFShas a value other than the default, then sequences of the whitespace characters space and tab are ignored at the beginning and end of the word, as long as the whitespace character is in the value ofIFS(anIFSwhitespace character). Any character inIFSthat is notIFSwhitespace, along with any adjacentIFSwhitespace characters, delimits a field. A sequence ofIFSwhitespace characters is also treated as a delimiter. If the value ofIFSis null, no word splitting occurs.Explicit null arguments (
""or'') are retained. Unquoted implicit null arguments, resulting from the expansion of parameters that have no values, are removed. If a parameter with no value is expanded within double quotes, a null argument results and is retained.Note that if no expansion occurs, no splitting is performed.
bash divide a palavra em sua variável se ela não for duplicada, então hello e world se tornam dois argumentos diferentes para echo . echo coloca um espaço entre os argumentos.