MTL specifications specify that a .mtl file is at ASCII format (which don't include accentuated and non latin letters), so I would even say "stick to non accentuated letters A to Z, digits 0 to 9 and underscores".
I think I didn't accept dashes because the OBJ specifications accepted only letters and numbers for group names.
Maybe I was too severe and I should accept dashes too?
Anyway, note that from version 4.0, it's possible to use spaces in material names.