If the Ctrl+Space sequence continues to remove character formatting, which is its default behaviour, that could be because:
• it cannot be re-assigned;
• re-assigning doesn't stop the default behaviour; or
• your Office installation is faulty.
Only the last of these can be remedied. You could try repairing the Office installation (via Start > Windows Control Panel > Programs > Programs & Features > Microsoft Office (version) > Change) to see if that makes any difference.

__________________
Cheers,
Paul Edstein
[Fmr MS MVP - Word]