The glue goes into the wood, it doesn't need space to work, the problem will be if its so tight that the action of putting it in either squishes all the glue out or its so tight there's no way for excess glue to get out and you can never get the joint to fully close (why the dominos have grooves). Its the difference between a push fit and a fit that needs a mallet and leverage to get this out of this groove. If its the latter its probably to tight.
Theres also the extra point that 12mm MDF can often be a little over and a little under the said size. Since working with the CNC which makes an exactly 12mm groove for our wall mounts I've found this more of a problem. Whole batches of wall mounts have had to be thrown out because although the groove was 12mm the MDF was actually closer to 12.5 and it didn't fit in comfortably leading to splitting.
