After logging out first..
valhallasw@lisilwen:~/src/pwb/pywikibot-compat$ python login.py Password for user valhallasw on wikipedia:nl No characters will be shown: Logging in to wikipedia:nl as valhallasw via API. Login failed. Wrong password or CAPTCHA answer? API login failed, retrying using standard webpage. Logging in to wikipedia:nl as valhallasw What is the answer to the captcha "CAPTCHA: " ?
Instead of showing the captcha URL, the above is shown, which obviously makes solving the captcha hard.