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I dislike this change, as it introduces inconsistency across
platforms. On Win32, as a result of PEP 277, Unicode file
names are only returned for Unicode directory names. There
was an explicit discussion about this aspect of PEP 277, and
this interface was accepted as The Right Thing. So I think
Unix should follow here: return byte string file names for
byte string directory names, and Unicode file names for
Unicode directory names. Support for Unicode directory names
should also invoke the file system encoding for the
directory name.

I'm also unsure about the exception handling. If there is a
file name that doesn't decode according to the file system
encoding, it raises the Unicode error. This means that all
other file names are lost. This might be acceptable if the
Unicode-in-Unicode-out strategy is used; in its current
form, the change can and will break existing applications
(which find all kinds of funny byte sequences on disk that
don't work with the user's file system encoding).