Given that my preference is to use Unix-style EOL for "text" files on Windows, as every text editor I use (barring notepad!) understands LF format, it seems to me that this proposal also means that the hook would be optional for me. That suits me fine - I'd prefer to avoid having hooks that are required for Python checkouts, as that means I have to remember to configure them on each clone (IIUC).
Yeah, this may also be what's making it harder for me to understand the issues.
Please trust that there are plenty of editors that get the line ending implementation wrong. I'm fairly certain that some Visual Studio versions are among them. They will recognize LF as a line ending, but add CRLF line breaks when the user presses enter.
In addition, some editors (in particular notepad) choke when confronted with LF-only files. It is very annoying if you have to look at source code at somebody else's machine which doesn't have any programmer editor installed (except for Visual Studio).