I can reproduce the issue on Fedora 29 in gnome-terminal.

Python is not blocked at all. It's just your terminal which stops displaying new strings. Try:

import time
print("\x98")
with open("x", "w") as fp:
    fp.write("done\n")
    fp.flush()
print("wait")
time.sleep(5)
print("exit")

And see file "x" created even after print("\x98").

Sorry, I'm not interested to investigate the terminal behavior.