I don't understand what you mean by removing dead code leading to loss of functionality, unless you mean that the removal of the call to the quoting code in Python3 led to a loss of functionality relative to Python2, in which case I agree.  It also led to the behavior being out of sync with the documentation.

Reviewing the history of the changes (see issue 1210), it appears to me that the removal of the call to _checkquote was in fact unintentional and is a bug (it existed in the port-to-python3 patch submitted by Victor, but was commented out, which probably means he had it commented out for testing and did not notice he had not restored it).  This makes the later removal of _checkquote incorrect as well.

This error is primarily a consequence of imaplib having very few tests.

This module needs a lot of love in Python3 from someone, and it is not an easy topic to wrap ones head around.  It's on my list of things to look at, but there are a bunch of things ahead of it.

For the immediate issue, it is working as documented in Python2.7, so there is nothing to do there.  For Python3 we haven't had the quoting since the start, so we have the opportunity to consider changing the quoting rules if we wish...and we may have have no choice, since the new behavior has been in released versions for several Python3 versions now and starting to quote like Python2.7 did might break otherwise working code.  I don't have an opinion on how to fix this this yet, since while I know more about the IMAP protocol than I did a year ago, I still don't know enough to even write the tests....