Status update: I've posted an initial PR to issue 30744 that relies on the trace hook semantic change proposed in the PEP to resolve the trace hook/cell reference incompatibility reported there.

That provides confidence that it really is only the semantics of *trace hooks* that we need to change, rather than anything about locals() or frame.f_locals in general.

So the next steps will be to do a final editing pass on the current PEP to account for the reference implementation, and then send it to python-dev for official review and pronouncement.