I agree this is not a bug. It is just one of the unfortunate compatibility breaks between Py 2 and 3. Mode="rt" is not one of the values that are supported according to the documentation; adding support would be a new feature.

I understand the file mode handling is stricter on Windows because the underlying OS or C library would crash.

To have code that works with Py 2 and 3, I would switch the mode depending on the version of Python:

if sys.version_info >= (3,):
    handle = gzip.open(filename, "rt")
else:
    handle = gzip.open(filename)