Link %20 stand-in for a space not working

The difference is indeed tiny:
&?search=alias vs. &search=alias

To clarify: there must be exactly one question mark following the URL proper, indicating that the query string (in the sense of HTTP) follows.

The parameters of the query are separated by & signs, and only those – no question mark after the first one,

In general, query parameters consist of a key (like search), followed by =, followed by a value (like Scott). Though valueless parameters are possible, too, I think. In which case the = is absent, too.

All this is old stuff from the beginning of the web, and there’s no room for leniency – query strings were many to be built by browser and other software, not mere mortals. It’s easy to introduce typos therefore.

I finally realized that I don’t need the %20 to create a space between the word Steve and the word Jobs. This was true when DEVONthink 3 came out in 2019 but apparently was corrected. Link below works!
x-devonthink-item://BFEC725D-65BA-400A-9836-32523505B6F1?search=Steve Jobs

Where exactly did you use this link? Some apps might add the missing percent escapes (%20), others not.

This PDF document was an apple Press Release in 2016. I opened the mac Text Edit that came with my mac and under the Format menu, I selected Make Rich Text. Copied and pasted the link into the just-created RTF document. This was outside of DEVONthink 3, on my desktop. This also works inside of DEVONthink.