I think Eryk's diagnosis is correct: this is a straight up bug in the original patch, where it's missing the check to only use the new logic when in isolated mode (as it's compensating for the fact that there is no extra sys.path[0] entry inserted in that case).

I mentioned that on the original issue http://bugs.python.org/issue29319#msg285904 but hadn't noticed that the relevant check was missing from the applied patch.