Alexey's analysis is correct.  The problem is seen when the Xcode command line tools are not installed.  When building an extension module, Distutils is then unable to find a compiler at the normal path and consults the 'xcrun' utility to find the location of an uninstalled compiler.  The output from the 'xcrun' is mistakenly converted to Unicode and this triggers the odd behavior in customize_compiler.  The fix, applied for release in 2.7.6, is to avoid the Unicode conversion for Python 2.