It would not, as @Quibblekrust@thelemmy.club explained in their comment (which I neglected to include in my explanation), Bash uses a special variable called IFS when executing for loops like this. IFS stands for Input Field Separators, and is a list of one of each type of whitespace (tab, space, and newline), and uses these as separators automatically.
So instead of taking that whole ls output as one string of text, the for loop automatically separates it into an iterable list of strings using the newline separator.

I didn't realize that. Thanks for pointing that out!