Comment 3 for bug 1249732

Seems to be to do with the following in set_acceptable_keys():

        try:
            if isinstance(acceptable_keys_config, unicode):
                acceptable_keys_config = str(acceptable_keys_config)
        except UnicodeEncodeError:
            # gpg Context.keylist(pattern) does not like unicode
            raise errors.BzrCommandError(
                gettext('Only ASCII permitted in option names'))

The acceptable_keys config is read in as a list, and that bit of code in try doesn't seem to be running to convert it to a string.