I have a build step with the MSBuild File configured thus:

%WORKSPACE%\wbuilder_%NODE_NAME%_%JOB_NAME%\Alpha\AlphaBeta\AlphaSolution\AlphaSolution.sln

Note that %WORKSPACE% will expand to C:\Program Files\Jenkins\jobs\AlphaBeta\workspace

This produces:

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Executing command: cmd.exe /C C:\WINDOWS\Microsoft.NET\Framework\v4.0.30319\MSBuild.exe %WORKSPACE%\wbuilder_%NODE_NAME%_%JOB_NAME%\Alpha\AlphaBeta\AlphaSolution\AlphaSolution.sln && exit %%ERRORLEVEL%%
[wbuilder_master_AlphaBeta] $ cmd.exe /C C:\WINDOWS\Microsoft.NET\Framework\v4.0.30319\MSBuild.exe %WORKSPACE%\wbuilder_%NODE_NAME%_%JOB_NAME%\Alpha\AlphaBeta\AlphaSolution\AlphaSolution.sln && exit %%ERRORLEVEL%%
Microsoft (R) Build Engine Version 4.0.30319.1
[Microsoft .NET Framework, Version 4.0.30319.235]
Copyright (C) Microsoft Corporation 2007. All rights reserved.

MSBUILD : error MSB1008: Only one project can be specified.
Switch: Files\Jenkins\jobs\AlphaBeta\workspace\wbuilder_master_AlphaBeta\Alpha\AlphaBeta\AlphaSolution\AlphaSolution.sln
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MSBuild is not applying quotes to the expanded parameter, so it is executing:

cmd.exe /C C:\WINDOWS\Microsoft.NET\Framework\v4.0.30319\MSBuild.exe C:\Program Files\Jenkins\jobs\AlphaBeta\workspace\wbuilder_master_AlphaBeta\Alpha\AlphaBeta\AlphaSolution\AlphaSolution.sln && exit %%ERRORLEVEL%%

There is a workaround which is to apply quotes in the Project configuration UI but this is not an intuitive operation for a user.

I would suggest that MSBuild apply quotes if they don't already exist around the parameter.