I don't think it's incorrect right now, from the POV of internal data of the stream, there's 6 chars, from the POV of caller, 5 chars are read. So this can be interpreted as 2 chars are combined into 1 char read.

On the other hand if TextIOBase was reading '\r' and letting caller process it and then reading '\n....' that would be of course a recipe to shoot the user in the foot, and would require a warning in big red letters in the docs. (Or even better fixing it to do what it does now.)