It is built into the phone - I believe it is part of Auto complete - a single space / punctuation mark inserts the auto-complete word that has been highlighted, and your cursor is one space away from the inserted word.
A second space inserts a period (similar to using double spaces after the end of a sentence, as I do everywhere I type), but pressing any particular punctuation inserts that punctuation mark before the space that is already three, leaving the cursor in the same position.
I see this all the time when entering text into just about every single app - SMS, FB, logging in to web pages using the default browser, etc.
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