On Windows, HOME is both split into two variables and replaced by USERPROFILE.
C:\Users\Terry>set HOME
HOMEDRIVE=C:
HOMEPATH=\Users\Terry

C:\Users\Terry>set USERPROFILE
USERPROFILE=C:\Users\Terry

So if it make sense to run this on Windows*, I would call it a bug.
* I am guessing that Windows' FTP clients do not use .netrc.

The doc says "the file .netrc in the user’s home directory will be read." without qualification by "if $HOME is set".  I don't remember how os.path.expanduser might otherwise find the home directory on unix and don't know what unix users might reasonbly expect.