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Typing [control j] instead of RET should jump to the beginning of line when electric-indent-mode is on. If EIM is off, RET jumps to the BOL and C-j to indent.
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What's happening is that org-babel-python-evaluate-session sends an extra newline when the indentation level goes down, this causes the interpreter to close out the top-level block.
What I've done is just commented out that bit (forgive the wonky indentation, my file as received from elpa mixes tabs and spaces)
ob-python.el
(defun org-babel-python-...
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