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With the following script:
import time
def foo():
 import pdb; pdb.set_trace()
 while 1:
 time.sleep(.5)
foo()
Hitting ^C after continue gives:
$ ./python foo.py
> foo.py(5)foo()
-> while 1:
(Pdb) continue
^C
Program interrupted. (Use 'cont' to resume).
--Call--
> Lib/signal.py(51)signal()
-> @_wraps(_signal.signal)
(Pdb)
This is fixed with the following change:
diff --git a/Lib/pdb.py b/Lib/pdb.py
--- a/Lib/pdb.py
+++ b/Lib/pdb.py
@@ -186,9 +186,9 @@
 raise KeyboardInterrupt
 self.message("\nProgram interrupted. (Use 'cont' to resume).")
 self.set_step()
- self.set_trace(frame)
 # restore previous signal handler
 signal.signal(signal.SIGINT, self._previous_sigint_handler)
+ self.set_trace(frame)
 def reset(self):
 bdb.Bdb.reset(self)

Fixed in issue 20766.