Compiler fault or some kind of weird referencing bug?

[micseydel]

return a new encoded list - instead of changing the argument list in place (which is side-effect - considered bad practice?! )

Yes, side-effects are generally-speaking not ideal, and don't gain anything here (sometimes modifying in-place is more efficient, but copies are being made here anyway).

[volcano63]

for x in range(0, 16):     data.append(x)

I was planning to point it out - but got distracted. Those 2 lines are absolutely redundant

data = list(range(16))

does the trick. (One of the few things from Scala/Java I personally miss in Python - toList method   )