Thanks for the report.  Have you found the bug with a real setup.cfg or hook, or were you just reading the code?

I’m not sure how hard to fix this will be.  The copy_file method delegates to shutil.copyfile, but this does not have the arguments we need, contrary to the former distutils file_util.copy_file function.

Currently it’s only build_py that uses this parameter: 

        # if a file is read-only in the working
        # directory, we want it to be installed read/write so that the next
        # installation of the same module distribution can overwrite it
        # without problems.  (This might be a Unix-specific issue.)  Thus
        # we turn off 'preserve_mode' when copying to the build directory,
        # since the build directory is supposed to be exactly what the
        # installation will look like (ie. we preserve mode when
        # installing).

Depending on whether shutil supports what we need, different patches could be made:
- Change code to use the right shutil function
- Add code in copy_file to walk and chmod
- Remove the preserve_* arguments and add another method for build_py