These things are best studied with msiexec ... /l*v python.log, then inspecting python.log. Without looking at the trace, I'd expect that the actual installation run doesn't inherit ModifyPath from the UI run.

The installer runs actually twice - once in the user account, performing the UI sequence and collecting all information. Then in the context of the installer service, running the execute sequence to modify the system. Information is passed in properties. However, not all properties are passed, only secure properties (which I believe must be UPPERCASE, in addition to being listed as a secure property).

However, I really recommend to not introduce another secure property, but instead use a custom action, see

http://www.advancedinstaller.com/user-guide/qa-conditional-feature.html

Write a VB script, and call Session.FeatureRequestState.

As yet an alternative, and possibly the best one, there is an AddLocal ControlEvent, see

http://msdn.microsoft.com/en-us/library/windows/desktop/aa367537(v=vs.85).aspx

Associating this event with the "Yes" button should make the feature selected. Note that you can have multiple control events for a button, so you can proceed to the next dialog after having this control event.