Bash – extglob 2nd “zero or more” operator not working

The short answer to your question is that *(pattern-list) will match zero or more occurrences of the given patterns. There are zero instances of Unicode character 0001 between each of the input bytes. So the replace operation replaces each of those zero instances by a single space.

Maybe you meant to do this:

$ for str in  $'\t' "ab"  ळ ; do  
    printf -- '%s' "${str//+($'\x01')/ }" |xxd
  done)
0000000: 09                                       .
0000000: 6162                                     ab
0000000: e0a4 b3                                  ...

But the longer answer is that in any case, pathnames aren't text. At least, they're not as far as the (Unix-like) operating system is concerned. They are byte sequences. The problem is that things like this are trivial to do:

$ LC_ALL=latin1
$ mkdir 'áñ' && cd 'áñ'
$ LC_ALL=ga_IE.iso885915@euro
$ mkdir '€25' && cd '€25'
$ LC_ALL=zh_TW
$ pwd
# ... what should the output be?  And what about the output of:
$ /bin/pwd

Each of those locales includes characters which don't exist in the others. This problem affects things like locate -r and find -regex too; the argument of locate -r is a regular expression which therefore must include support for things like character classes; but you don't know what locale to use to determine the character classes for the characters in the path names or even if there is a single usable locale which can be used to represent all the paths on the system.

As I understand this, there's an exception to the doc snippet in my question. The snippet was:

If a sigspec is RETURN, the command arg is executed each time a shell function or a script executed with the . or source builtins finishes executing.

The exception is described here:

All other aspects of the shell execution environment are identical between a function and its caller with these exceptions: the DEBUG and RETURN traps (see the description of the trap builtin under SHELL BUILTIN COMMANDS below) are not inherited unless the function has been given the trace attribute (see the description of the declare builtin below) or the -o functrace shell option has been enabled with the set builtin (in which case all functions inherit the DEBUG and RETURN traps), and the ERR trap is not inherited unless the -o errtrace shell option has been enabled.

As for functrace, it can be turned on with the typeset's -t:

-t Give each name the trace attribute. Traced functions inherit the DEBUG and RETURN traps from the calling shell. The trace attribute has no special meaning for variables.

Also set -o functrace does the trick.

Here's an illustration.

$ trap 'echo ko' RETURN
$ f () { echo ok; }
$ cat y
f
$ . y
ok
ko
$ set -o functrace
$ . y
ok
ko
ko

As for declare, it's the -t option again:

-t Give each name the trace attribute. Traced functions inherit the DEBUG and RETURN traps from the calling shell. The trace attribute has no special meaning for variables.

Also extdebug enables function tracing, as in ikkachu's answer.