Starting from "emacs -Q -f -eshell":

   ~ $ echo $(list 'quote 'hello)
   'hell

The last character of "hello" was stripped. That's because 
'eshell-stringify' tries to remove the trailing newline from 
'pp-to-string', but it does so by always stripping the last character 
from the result. Obviously, that only works when the last character 
really is a newline.

Attached is a patch with regression tests for 'eshell-stringify' so that 
this works correctly.