I can't tell if this is "feature" or a "bug" but either way this
behavior struck me as strange.
"""
def func():
  x = 5
  def inc():
    temp = x + 1 # when inc() is execute, this line fails
    x = temp
    return x
  return inc

i = func()
i() # will raise error
"""
It says that x referenced before defined (when computing x + 1). It
seems that the fact that x is assigned in the local inc() that it
shadows the outer x.
Even stranger is that if you remove the the assignment of "x = temp"
there is no error; suggesting the assignment to x anywhere in the inner
function shadows the entire function. 

This is not the expected behavior, so I thought it may be bug.

It's feature.

In python 3 you can use the 'nonlocal' keyword to access the variable in
the outer scope for assignment.