3.11 Regression, Py_Initialize; Fatal Python error: init_fs_encoding: failed to get the Python codec of the filesystem encoding

Bug report

Build and run the following program;

  #include <Python.h>
  
  int main(int argc, char* argv[])
  {
    Py_Initialize();
    return 0;
  }

The resulting executable runs fine when executed against the installed C:\Program Files\Python311\python311.dll

Executing against python311.dll copied to some other folder (C:\Windows\System32 for instance) results in;

Fatal Python error: init_fs_encoding: failed to get the Python codec of the filesystem encoding
Python runtime state: core initialized
ModuleNotFoundError: No module named 'encodings'

Current thread 0x0000333c (most recent call first):
  <no Python frame>

When also C:\Program Files\Python311\Lib\encodings is copied then the executable runs fine again.

This is not the case with Python versions prior to 3.11. The only thing needed to run Python embedded for versions below 3.11 is the appropriate pythonXXX.dll

Your environment

• CPython versions tested on:
  Python 3.11.0 (main, Oct 24 2022, 18:26:48) [MSC v.1933 64 bit (AMD64)] on win32
• Operating system and architecture:
  Edition Windows 11 Pro
  Version 21H2
  Installed on ‎11/‎24/‎2021
  OS build 22000.1098
  Experience Windows Feature Experience Pack 1000.22000.1098.0
• Compiler used:
  Microsoft Visual Studio Community 2022
  Version 17.3.6
  VisualStudio.17.Release/17.3.6+32929.385
  Microsoft .NET Framework
  Version 4.8.04161
  Installed Version: Community
  Visual C++ 2022 00482-90000-00000-AA258
  Microsoft Visual C++ 2022

Start with the C program using Py_Initialize and Python.h, reproducing the behavior on Windows 11 with Python 3.11. Compare execution with the installed python311.dll, a copied DLL, and earlier Python versions, then investigate how initialization locates Lib/encodings. Done means the copied Python 3.11 DLL can initialize without separately copying the encodings directory.