Oh, sorry, I missed the workarounds when I read the issue.  So your issue is you want to use a lambda rather than a full function for the side effect and it looks ugly.

I agree that given the names 'side_effect' and 'return_value' you'd think return_value would take precedence.  On the other hand, the API is what it is, and I'm not sure we can change it for backward compatibility reasons.  Option 1 is definitely not on the table, and the problem with option 2 is that it is easy to imagine a side_effect that conditionally returns mock.DEFAULT.