> - when stdin is a pipe (ex: echo "abc"|python ...), the stdin encoding becomes cp1252 (ANSI code page) because os.device_encoding(0) returns None; cp1252 is the result of locale.getpreferredencoding(False) (ANSI code page). sys.stdin.readline() does not contain a BOM.

What if echo non-ascii characters? How they are encoded?

Perhaps Python should detect when it is ran under PowerShell in a pipe and set stdin (and/or stdout and stderr) encoding to CP65001).