Review

You don't have a lot of code here to review, so this will necessarily be short.

• PEP-8: The Style Guide for Python Code recommends:
  • snake_case for functions, variables, and parameters. So aString should be a_string, and retVal should be ret_val.
• Better parameter names
  • What is aString? "Hello World" is a string, but we can't use it, because you are actually expecting a hexadecimal string. Perhaps hex_string would be a better parameter name.
  • Similarly, binary_string would be more descriptive than retStr.
• A '''docstring''' would be useful for the function.
• Type hints would also be useful.

Alternate Implementation

Doing things character-by-character is inefficient. It is usually much faster to let Python do the work itself with its efficient, optimized, native code functions.

Python strings formatting supports adding a comma separator between thousand groups.

>>> f"{123456789:,d}"
'123,456,789'

It also supports adding underscores between groups of 4 digits when using the binary or hexadecimal format codes:

>>> f"{548151468:_x}"
'20ac_20ac'
>>> f"{0x20AC:_b}"
'10_0000_1010_1100'

That is most of the way to what you're looking for. Just need to turn underscores to spaces, with .replace(...) and fill with leading zeros by adding the width and 0-fill flag to the format string.

def str_bin_in_4digits(hex_string: str) -> str:
    """
    Turn a hex string into a binary string.
    In the output string, binary digits are space separated in groups of 4.

    >>> str_bin_in_4digits('20AC')
    '0010 0000 1010 1100'
    """

    value = int(hex_string, 16)
    width = len(hex_string) * 5 - 1
    bin_string = f"{value:0{width}_b}"
    return bin_string.replace('_', ' ')

if __name__ == '__main__':
    import doctest
    doctest.testmod(verbose=True)

Depending on your definition of elegant, you can one-line this:

def str_bin_in_4digits(hex_string: str) -> str:
    """
    Turn a hex string into a binary string.
    In the output string, binary digits are space separated in groups of 4.

    >>> str_bin_in_4digits('20AC')
    '0010 0000 1010 1100'
    """

    return f"{int(hex_string,16):0{len(hex_string)*5-1}_b}".replace('_', ' ')