oh. My mistake. I didn't realize the error was in 'distutils.fancy_getopt' and not in the getopt module itself. Indeed, the problem doesn't exist under getopt itself, so is specific to distutils and fancy_getopt.

>>> from __future__ import unicode_literals
>>> import getopt
>>> getopt.getopt('-x', 'x', ('--longx',))
([], u'-x')
>>>