The locale issue is that on a default (us english) install of 10.9 the following locale related environment variables are set:

$ set | grep UTF
LANG=en_US.UTF-8
LC_CTYPE=UTF-8

The locale module doesn't understand the LC_CTYPE setting, and this appears to be a at best under documented feature of OSX: you can use "UTF-8" as the locale name for LC_CTYPE and this is handled sanely by libc. 

Issue #18378 appears to be related to this.

IMHO this is a real bug and should be fixed because the locale module's documentation says it exposes the C library's functionality.