I’m aware of several workarounds and this one is perhaps the best. However, I’d prefer if RET would just work as expected. Org sometimes inserts extra material on RET which I think is okay (e.g. indentation), but is there any precedent, in Org or Emacs more broadly, for RET deleting text? It seems very counter-intuitive to me.

Could it be that the space is being deleted not when you press RET but when you save the file? I don't see any space deletion when entering an empty headline, but in my config, whitespace at end of lines is deleted on save. In Doom Emacs this is enabled by default, and even before I was using =delete-trailing-whitespace= as part of my =before-save-hook=.

--Diego