gh-145234: Normalize decoded CR in string tokenizer

Lib/test/test_py_compile.py

@@ -239,6 +239,14 @@ def test_quiet(self):
             with self.assertRaises(py_compile.PyCompileError):
                 py_compile.compile(bad_coding, self.pyc_path, doraise=True, quiet=1)
 
+    def test_utf7_decoded_cr_compiles(self):
+        with open(self.source_path, 'wb') as file:
+            file.write(b"#coding=U7+AA0''\n")
+
+        pyc_path = py_compile.compile(self.source_path, self.pyc_path, doraise=True)
+        self.assertEqual(pyc_path, self.pyc_path)
+        self.assertTrue(os.path.exists(self.pyc_path))
+
 
 class PyCompileTestsWithSourceEpoch(PyCompileTestsBase,
                                     unittest.TestCase,

Misc/NEWS.d/next/Core_and_Builtins/2026-02-26-21-36-00.gh-issue-145234.w0mQ9n.rst

@@ -0,0 +1,5 @@
+Fixed a ``SystemError`` in the parser when an encoding cookie (for example,
+UTF-7) decodes to carriage returns (``\r``). Newlines are now normalized after
+decoding in the string tokenizer.
+
+Patch by Pablo Galindo.

Parser/tokenizer/string_tokenizer.c

@@ -108,6 +108,19 @@ decode_str(const char *input, int single, struct tok_state *tok, int preserve_cr
     else if (!_PyTokenizer_ensure_utf8(str, tok, 1)) {
         return _PyTokenizer_error_ret(tok);
     }
+    if (utf8 != NULL) {
+        char *translated = _PyTokenizer_translate_newlines(
+            str, single, preserve_crlf, tok);
+        if (translated == NULL) {
+            Py_DECREF(utf8);
+            return _PyTokenizer_error_ret(tok);
+        }
+        PyMem_Free(tok->input);
+        tok->input = translated;
+        str = translated;
+        Py_CLEAR(utf8);
+    }
+    tok->str = str;
     assert(tok->decoding_buffer == NULL);
     tok->decoding_buffer = utf8; /* CAUTION */
     return str;