Using socket.makefile in read-write mode had a bug introduced between version 3.6.6 and 3.6.7. The same bug is present in version 3.7.x.

The below code example will behave very differently between 3.6.6 and 3.6.7. It's based on the echo-server example from the docs.

import socket

HOST = '127.0.0.1'
PORT = 0

with socket.socket(socket.AF_INET, socket.SOCK_STREAM) as s:
    s.setsockopt(socket.SOL_SOCKET, socket.SO_REUSEADDR, 1)
    s.bind((HOST, PORT))

    print(f'Waiting for connection on port {s.getsockname()[1]}')
    s.listen(1)

    conn, addr = s.accept()
    print(f'Connected by {addr}')

    with conn:
        f = conn.makefile(mode='rw')

        while True:
            m = f.readline()
            print(f'msg: {m!r}')

            if not m:
                exit(0)

            f.write(m)
            f.flush()


Python 3.6.7:
Sending the string "Hello\nYou\n" will only print "Hello\n" and also only return "Hello\n" to the client.
Removing the lines with f.write(m) and f.flush() and both "Hello\n" and "You\n" will be returned to the client.
It's like the call to f.write() somehow empties the read buffer.

Python 3.6.6:
Sending "Hello\nYou\n" will return "Hello\n" and "You\n" to the client without any modifications to the above code.

Looking over the changelog, my guess (untested) is this is caused by commit d6a283b3 for Issue 25862. That change looks like it drops the internal TextIOWrapper decoding buffer for each successful write.

I don't have the right version of Python to test with, but I expect this to also be broken without using a socket:

>>> f = TextIOWrapper(BufferedRWPair(BytesIO(b"Hello\nYou\n"), BytesIO()))
>>> f.readline()
'Hello\n'
>>> f.write(_)
6
>>> f.readline()  # Does this now return EOF?
'You\n'

>>> f = TextIOWrapper(BufferedRWPair(BytesIO(b"Hello\nYou\n"), BytesIO()))
>>> f.readline()
'Hello\n'
>>> f.write(_)
6
>>> f.readline()  # Returns empty string
''

Recreatable on master as well, also Martin your suspicion seems correct, reverting https://github.com/python/cpython/commit/23db935bcf258657682e66464bf8512def8af830 fixes it.

Added PR 11878, this will pass both this bug report and PR 3918 regression, the commit Ammar noted, it is an addition to this change.