I think the comments are correct in that it is used to create a new statically linked interpreter that includes a user provided extension module.  We could include python.o inside the libpythonXX.a file but then I think it breaks if you are embedding (e.g. linking .a to your own .o that has a main function).

It seems probable that no one uses python.o anymore but my preference would be to not remove it unless we are going to completely remove support for statically linking.  Nothing is really hurt by having that .o file in the install and the feature still works as originally intended.

It would be good to add a comment in the makefile, describing the possible use for that file.