No, when that line in the code is reached, the transfer is already complete. The scenario this patch fixes is the following (at least this is what I believe happens by reading lots of Wireshark logs):

Sender sends last few bytes in the form of a few TCP data packets, then immediately closes the connection without draining the read buffer of the TCP socket, this makes Linux send a TCP RST packet to the receiver
Receiver's kernel buffers data from the last few TCP data packets, but before Pidgin does a read() in purple_xfer_read to get this data, the kernel sees the aforementioned RST packet
When Pidgin actually does the read() in purple_xfer_read, because the kernel saw the RST packet, the read syscall returns -1 (or 0, I forgot), so Pidgin discards the last few data packets

This patch makes it so the kernel doesn't send the RST packet at all.

Gotcha, thank you very much for the explanation!

IIRC, for IRC DCC file transfers, the receiver sends back the bytes received for every chunk it receives. That is what's in the read buffer. However, IRC does not decide that the file transfer is complete; libpurple does, when sent size >= file size. This means IRC cannot correctly set the complete flag because libpurple overrides it. The most "correct" fix is that IRC should set complete and not libpurple, but I suspect that having libpurple not do the send size >= file size check will just break something else.