> Which is actually what TCO means: translation of recursive functions into functions that use loops, at the AST level.

That's not correct. It's not TRO, TCO. So as it's normally understood any call in tail position would be eliminated.

In Python today, this program:

    def foo():
        bar()

    def bar():
        baz()

    def baz():
        raise Exception('OH NOES')

    foo()

will output:

    Traceback (most recent call last):
      File "raise.py", line 10, in <module>
        foo()
      File "raise.py", line 2, in foo
        bar()
      File "raise.py", line 5, in bar
        baz()
      File "raise.py", line 8, in baz
        raise Exception('OH NOES')
    Exception: OH NOES

If Python did TCO, you'd get:

    Traceback (most recent call last):
      File "raise.py", line 8, in baz
        raise Exception('OH NOES')
    Exception: OH NOES

Not wanting to lose helpful information like this is a valid cause for concern. I used to think Guido was wrong for not wanting TCO in Python but I've yet to see anyone give a clear example of what having it would let you express more easily than you can now with iterators/loops/yield etc.

TCO is a fine feature in languages where its deeply engrained and part of its natural idioms. Bolting it on twenty years later doesn't seem that helpful to me.