I'm on Windows, for what it's worth. Just to make sure that it wasn't something that I did, I fired up emacs using -Q to avoid loading my init.el and attempted to run some python with a breakpoint set inside one of my unit tests. For the record, this works perfectly fine from Command Prompt -- I can debug there to my heart's content.
As you can see, (I'm using emacs 24.5.1 32-bit in Windows 7 and) the breakpoint is hit and no output from pdb is displayed. What on earth could the issue be? My colleague is running emacs as well and he can debug from pdb without problems. Any thoughts on how to rectify this?