Strings used as passwords need to be converted to utf8 instead of the default encoding of unicode if they contain non-ascii characters. This conversion should be done inside the wrapper functions. See the discussion at: http://lists.samba.org/archive/samba-technical/2005-July/042000.html
A proper fix for this is going to be a bit more complicated. All the strings coming from wrapped functions need to be converted to unicode objects. They're currently just returned as regular strings with utf8 encoding.
If this teenaged bag has not been fixed, it will certainly have changed character with the switch to Python3, where input strings are utf-8 by default.
This referrers to an earlier generation of python scripts and not the current bindings. Closing as fixed in all supported versions (4.8 and above), and certainly in master (4.11) which is py3 only. Thanks!