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So the problem seems to be that Python assumes Readline’s encoding is UTF-8, but Readline actually uses ASCII (depending on locale variables). The code at the start of the test is supposed to catch when add_history() calls PyUnicode_EncodeLocale() and fails.
I don’t understand the details of UTF-8 vs locale on Android, but maybe we could adjust the encode() and decode() implementations in Modules/readline.c, to account for the Readline library’s idea of the locale encoding. Or maybe we could adjust the temporary setlocale() calls in Modules/readline.c.
If you are happy to declare the Readline library is broken on Android, I now think I would prefer to skip the test based on support.is_android, rather than the previous patches. Otherwise, we risk masking genuine test failures on other platforms. Something like:
@unittest.skipIf(is_android,
 "Gnu Readline disagrees about the locale encoding on Android")
def test_nonascii(self):
 try:
 readline.add_history("\xEB\xEF")
 ...
When you run "LANG= bash", it is only Bash and Readline that gets the C locale; the terminal is unchanged. I presume the terminal inputs é as two UTF-8 bytes, but Readline with the C locale is not aware of UTF-8, and assumes the two bytes are two separate characters.