The SASL protocol says that the encoded base64 should be formed from:

null + login + null + password

The smtplib is not doing it, instead its "converting" the \012 (\0 + 2 first chars from password) in the char "\n", and it's right in the python way to see the things, it's not the bug reported here. The bug is a patch to change the null character representation from \0 to \x00 (using the hexadecimal representation) in the encode_base64 call to prevent the "conversion" and generate the right base64 encoded string.