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Thanks Victor for the details. Can this be classified as an easy issue? I guess the fix will be as below : 
1. Add an entry for '-I' at https://github.com/python/cpython/blob/4b430e5f6954ef4b248e95bfb4087635dcdefc6d/Lib/subprocess.py#L260
2. Add a test for '-I' at https://github.com/python/cpython/blob/4b430e5f6954ef4b248e95bfb4087635dcdefc6d/Lib/test/test_support.py#L472. 
The only thing here is that '-I' returns '-s -E -I' unlike other options where args can be used for comparison logic in check_options. check_options should be changed so that this can take given args and the expected args for comparison to accommodate -I. Maybe there is a better way?
Off topic : I don't know why '-I' is not documented as sys.flags.isolated at https://docs.python.org/3.7/library/sys.html#sys.flags . Maybe I will open up a separate issue for this?