Eric: the bug does not exist with 2.7, as the Makefile is read as bytes. 
It exists with 3.1.2.

By the way, when I say the bug is solved on 3.2, I only mean the narrow 
problem of using a
non-ascii prefix that *is* decodable with the current locale. I do not 
mean the more general
problem that arises, for example, when building with the 'C' locale, as 
is discussed in issue9561.
With a 'C' locale, the build fails also with 3.2.