I would have responded earlier, but the forums wouldn't let me post for a while.
So when you write 'ABCDEF' etc... each letter has a gap between it and so it crops and makes an image out of it?
Yep, except for the cropping part (as mentioned about the image manipulator's crop feature not working). It's actually using layer masking to 'clear' the rest of the font sprite away aside from the current letter.
If you want to implement it in construct, that'd be awesome!
What happens with fonts that intentionally have gaps in individual characters?
Exactly the same thing as with other gaps, it will be made into a separate image, so it won't work with some fonts.
lucid: I thought about doing that (checking for horizontal gaps using the same method as checking for columns of pixels, then checking each row like the font splitter currently does) when I was thinking about the sprite sheets thing, but thought it wouldn't work well due to the semi-chaotic way sprite sheets are sometimes set up. However, with an image like that, it would work well. David might make my font splitter obsolete, though.