ValueError: No escaped character on Windows versions with Python 3

[Nebelwerfer-G]

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Question

Running version 2018.08.02 from multiple sources (Chocolatey/pip/official standalone executables), my youtube-dl seems to occationally raise the following error when dealing with any commands requires Internet connection or including a URL:

PS C:\Users\fearh\Desktop\POD> youtube-dl.exe -U -v
Traceback (most recent call last):
  File "c:\python36\lib\runpy.py", line 193, in _run_module_as_main
    "__main__", mod_spec)
  File "c:\python36\lib\runpy.py", line 85, in _run_code
    exec(code, run_globals)
  File "C:\Python36\Scripts\youtube-dl.exe\__main__.py", line 9, in <module>
  File "c:\python36\lib\site-packages\youtube_dl\__init__.py", line 474, in main
    _real_main(argv)
  File "c:\python36\lib\site-packages\youtube_dl\__init__.py", line 58, in _real_main
    parser, opts, args = parseOpts(argv)
  File "c:\python36\lib\site-packages\youtube_dl\options.py", line 904, in parseOpts
    user_conf = _readUserConf()
  File "c:\python36\lib\site-packages\youtube_dl\options.py", line 83, in _readUserConf
    default=None)
  File "c:\python36\lib\site-packages\youtube_dl\options.py", line 52, in _readOptions
    res = compat_shlex_split(contents, comments=True)
  File "c:\python36\lib\shlex.py", line 305, in split
    return list(lex)
  File "c:\python36\lib\shlex.py", line 295, in __next__
    token = self.get_token()
  File "c:\python36\lib\shlex.py", line 105, in get_token
    raw = self.read_token()
  File "c:\python36\lib\shlex.py", line 206, in read_token
    raise ValueError("No escaped character")
ValueError: No escaped character

PS C:\Users\fearh\Desktop\POD> youtube-dl.exe "https://www.youtube.com/watch?v=BaW_jenozKc" -v
Traceback (most recent call last):
  File "c:\python36\lib\runpy.py", line 193, in _run_module_as_main
    "__main__", mod_spec)
  File "c:\python36\lib\runpy.py", line 85, in _run_code
    exec(code, run_globals)
  File "C:\Python36\Scripts\youtube-dl.exe\__main__.py", line 9, in <module>
  File "c:\python36\lib\site-packages\youtube_dl\__init__.py", line 474, in main
    _real_main(argv)
  File "c:\python36\lib\site-packages\youtube_dl\__init__.py", line 58, in _real_main
    parser, opts, args = parseOpts(argv)
  File "c:\python36\lib\site-packages\youtube_dl\options.py", line 904, in parseOpts
    user_conf = _readUserConf()
  File "c:\python36\lib\site-packages\youtube_dl\options.py", line 83, in _readUserConf
    default=None)
  File "c:\python36\lib\site-packages\youtube_dl\options.py", line 52, in _readOptions
    res = compat_shlex_split(contents, comments=True)
  File "c:\python36\lib\shlex.py", line 305, in split
    return list(lex)
  File "c:\python36\lib\shlex.py", line 295, in __next__
    token = self.get_token()
  File "c:\python36\lib\shlex.py", line 105, in get_token
    raw = self.read_token()
  File "c:\python36\lib\shlex.py", line 206, in read_token
    raise ValueError("No escaped character")
ValueError: No escaped character

However commands like --help or --version works fine.
Commands tested on Python 3.4 and 3.6 and similar error persists. I have read the part regarding escaping characters in the command line and I feel it's probably not an youtube-dl issue, but in desperate efforts on finding solutions I decided to post here anyway.

[lightmare]

It appears you have a malformed user configuration file. Either find and fix this config, or run with --ignore-config option to skip reading it.

[Nebelwerfer-G]

This is the very issue, many thanks.