The first thing that makes me dubious about your code is that you are supposed to returning a series of strings, but your return value is a string.
Perhaps, you should nail down your base case and recursive step.
It looks like you’ve got a start on the base case. You can insert zero spaces in the empty string, so
allPossibleSpacings("") -> [ "" ]
but you don’t want to insert a space at the end, so you need a second base case
allPossibleSpacings("x") -> [ "x" ]
and then your recursive step could be
allPossibleSpacings("x" + s) -> flatten(
∀ t : allPossibleSpacings(s), ["x" + t, "x " + t])
I won’t help you write that in Java since it’s homework, but hope that helps.