The test is telling you what is wrong. You are parsing 'hello''example' as two arguments.
In Bash “arguments” are referred to as tokens. They are separated by “metacharacters”. When you find the ending single quote you think you are done, so you add the text between ' as its own element to your argument list. This is wrong because we haven’t reached a metacharacter yet (like an unquoted space). Same thing with double quotes .