At the very begining of 2011 microsoft made a big move in changing something. The way gamertags work. It was not a glitch however it just allowed you to make spaced variants of any gamertag you want, for example before they changed it Boy, B oy, and b o y was made. Boy and b o y was made and are v1's that's how you know it wasn't a glitch back in 2010/2011 but that's when people thought "This would technically be a OG right?" WRONG!
So at the very begginging of 2011 Microsoft ended up changing the way gamertags work by not allowing you to create unspaced/spaced versions of a tag. What that means is that say i had the gamertag K in G for example, that means King cannot be made, and K ing cannot be made because it's 'technically' the same thing as K in G. Same thing goes if i have just King. King prevents K ing from being made now but back before they made the update i could go right now and make K ing, K i ng, K i n g, K in g etc.
There is a upside though to this being changed. Say you have the gamertag A A and there is a v1 gamertag (Gamertag created on the OG Xbox and never migrated over to the Xbox360) AA, well since they're the 'same thing' if AA ever resets, someone CANNOT make AA because you have A A. This in a sense reserves you the gamertag AA until you change A A to something random, and then back to AA. Now some people say that you can't make it AA anymore. You can, it's just sometimes when you swap a tag you can't immediatley change it to a unspaced version and it goes into 'limbo' and won't let you take it, that's just a glitch. What you have to do is if it won't let you take the unspaced variant right away take a different spaced variant and then change that spaced variant to the unspaced variant and wallah, you now have a unspaced 2 Letter gamertag.
I hope this answered your questions, if you need any assistance feel free to Private Message me.