All errors raised in the __iter__ method are masked by the TypeError exception in the "in" operator and functions operator.contains(), operator.indexOf() and operator.countOf().

>>> class BadIterable:
...     def __iter__(self):
...         1/0
... 
>>> 
>>> 1 in BadIterable()
Traceback (most recent call last):
  File "<stdin>", line 1, in <module>
TypeError: argument of type 'BadIterable' is not iterable

It includes exceptions out of control of the programmer like MemoryError and KeyboardInterrupt. Converting them to TypeError can lead to weird errors or incorrect results.

See also similar issue26407.

New changeset cafe1b6e9d3594a34aba50e872d4198296ffaadf by Serhiy Storchaka in branch 'master':
bpo-40824: Do not mask errors in __iter__ in "in" and the operator module. (GH-20537)
https://github.com/python/cpython/commit/cafe1b6e9d3594a34aba50e872d4198296ffaadf

New changeset 353c4bab7d103cb66391a83f3c27cd75ae13a754 by Miss Islington (bot) in branch '3.9':
bpo-40824: Do not mask errors in __iter__ in "in" and the operator module. (GH-20537)
https://github.com/python/cpython/commit/353c4bab7d103cb66391a83f3c27cd75ae13a754

New changeset b99824a8e14d94c3c5c29499a08fe70deb477d0c by Miss Islington (bot) in branch '3.8':
bpo-40824: Do not mask errors in __iter__ in "in" and the operator module. (GH-20537)
https://github.com/python/cpython/commit/b99824a8e14d94c3c5c29499a08fe70deb477d0c

@Serhiy, you have opened PRs for this for 3.7 and 3.6, both of which are now in the security-fix phase of their release cycles. It looks like this behavior has been around for a long time and does not appear to be a security issue. Unless there is some important reason why this behavior should be changed in a security fix release (for 3.6) or as a release critical fix for 3.7.8 final and unless another core developer reviews the changes, I do not think the PRs should be merged to 3.7 or 3.6.

Sorry, I was not sure which versions are in security-fix phase now.