Cygwin allows mounting directories within other mount
points.  This can cause os.path.realpath to expand some
symlinks that it shouldn't.  For example:

$ cd /
$ mkdir X
$ mkdir X/Y
$ ln -s X Z
$ mount C:/ /Z/Y
$ ls Z/Y
[...contents of C:\...]
$ ls X/Y
[empty directory]

$ python -c "import os; print os.path.realpath('Z/Y')"
/X/Y
[bad because /X/Y is empty yet the original Z/Y has files]

In Cygwin, the correct answer would be either 'C:\\' or
'/cygdrive/c/'.

Conceivably this problem can happen in UNIces other
than Cygwin.  It would be rather annoying to fix,
because it would require looking at the mount table. 
But I thought I would mention it anyway...

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I'd think this is rather a Cygwin bug than a Python bug.

Before the mount, /X/Y and /Z/Y refer to the same directory,
and on Unix they have the same device/inode combination. 
And that combination is the all-important factor when doing
a mount on that directory.
If you do this on Unix (I used an NFS mount instead of the
mount shown in the report), both /X/Y and /Z/Y contain the
mounted directory.

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I agree with Sjoerd - this is a Cygwin bug, not a Python one.

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Closing as suggested.