Why does setdefault evaluate default when key is set?

The problem is not in setdefault, but in a general principle in Python (as well as most languages) that all arguments must be evaluated before the function is called. That is, even before Python checks to see if the key is in the dictionary, it needs to know the value of both the key and the default value: and since the default value is the result of a function, that function must be called first.