Here are some places letter-spacing should not apply.
SPHINX
BLACK
QUARTZ
SPHINX
Here is a screenshot of how this page renders in Chrome 73 on Mac:
And here a rough mockup of how I would expect it to render, given both the definition of letter-spacing in the css3 spec and general typographic traditions:
Read more about letter-spacing: https://drafts.csswg.org/css-text-3/#propdef-letter-spacing