If you modify your example to
\show\nobreakspace
\usepackage{fontspec}
\show\nobreakspace
You will see
> \nobreakspace=macro:
->\protect \nobreakspace .
l.9 \show\nobreakspace
...
> \nobreakspace=macro:
->\EU1-cmd \nobreakspace \EU1\nobreakspace .
l.11 \show\nobreakspace
which means that the EU1 encoding setup has changed \nobreakspace from being an encoding-independent command to an encoding-dependent command, but without setting up a default definition so it works in all encodings. Re-instating the original definition as the default is probably the simplest thing, however note you should not be mixing fontenc and fontspec encoding definitions in a single document.
The original definition is
\DeclareRobustCommand{\nobreakspace}{%
\leavevmode\nobreak\ }
So you could declare a default via
\DeclareTextCommandDefault{\nobreakspace}{\leavevmode\nobreak\ }
as noted in the comments.
Note that your definition would not work if it was used in vertical mode, eg the start of a paragraph as in that position the \nobreak would prevent a page break not a line break.
Unrelated to the question you have lots of white space tokens in your definition which will produce white space in the output: put a % at the end of every line within the definitiosn that ends with } or {.
Note also you need to use xelatex to use fontspec but you also load microtype which generates a warning that it does not work with xelatex:
Package microtype Warning: You don't seem to be using pdftex.
(microtype) `microtype' only works with pdftex.
(microtype) Try running `pdflatex' instead of `xelatex'.
Unless you have the beta version as pointed out by @UlrikeFischer. See.
http://tlcontrib.metatex.org/cgi-bin/package.cgi/action=view/id=423
Best Answer
The error happens when LaTeX is reading line 538 in the bibliography file, probably generated by BibTeX.
The entry refers to an author named
(a chemist at the Jagellonian University in Kraków) whose name, in BibTeX-speak, becomes
Dynarowicz-{\L}{\k{a}}tka, where you see\k.Just add
to your document preamble.