According to https://docs.python.org/3/reference/lexical_analysis.html#lexical-analysis, the encoding of a sourcefile (in Python 3) defaults to utf-8* and a decoding error is (should be) reported as a SyntaxError. Since b"\x7f\x00\x00\n''s\x01\xfd\n'S" is not invalid as utf-8, I expect a UnicodeDecodeError converted to SyntaxError.

* compile(bytes, filename, mode) defaults to latin1 instead.  It has no decoding problem, but quits with "ValueError: source code string cannot contain null bytes".  On 2.7, I might expect that as the error.

I expect '''self.assertIn(b"Non-UTF-8", res.err)''' to always fail because error messages are strings, not bytes.  That aside, have you ever seen that particular text (as a string) in a SyntaxError message?).

Why do you think the crash is during the tokenizing phase?  I could not see anything in the AS report.