The problem you have with more than one word in the COPY command is because you are using macros. Here is the modified version of your code which should work fine:

LFOLDER = 'full path' + '\system\*.*'
LFOLDER1 = 'full path'
copy "&LFOLDER" TO "&LFOLDER1"

If you notice, I have added quote marks in the last line, the COPY command.

Regards,
Rishabh.