Buggy python submission (verdict: Runtime Error):

import sys;input=sys.stdin.readline
from collections import deque, defaultdict
def encode(i, j):
    return 2 + K + i*M + j
from heapq import heappush, heappop
class MinCostFlow:
    INF = 10**18

    def __init__(self, N):
        self.N = N
        self.G = [[] for i in range(N)]

    def addEdge(self, fr, to, cap, cost):
#        print(fr, to, 10**18-cost)
        forward = [to, cap, cost, None]
        backward = forward[3] = [fr, 0, -cost, forward]
        self.G[fr].append(forward)
        self.G[to].append(backward)

    def minCostFlow(self, s, t, f):
        N = self.N; G = self.G
        INF = MinCostFlow.INF

        res = 0
        H = [0]*N
        prv_v = [0]*N
        prv_e = [None]*N

        d0 = [INF]*N
        dist = [INF]*N

        while f:
            dist[:] = d0
            dist[s] = 0
            que = [(0, s)]

            while que:
                c, v = heappop(que)
                if dist[v] < c:
                    continue
                r0 = dist[v] + H[v]
                for e in G[v]:
                    w, cap, cost, _ = e
                    if cap > 0 and r0 + cost - H[w] < dist[w]:
                        dist[w] = r = r0 + cost - H[w]
                        prv_v[w] = v; prv_e[w] = e
                        heappush(que, (r, w))
            if dist[t] == INF:
                return None

            for i in range(N):
                H[i] += dist[i]

            d = f; v = t
            while v != s:
                d = min(d, prv_e[v][1])
                v = prv_v[v]
            f -= d
            res += d * H[t]
            v = t
            while v != s:
                e = prv_e[v]
                e[1] -= d
                e[3][1] += d
                v = prv_v[v]
        return res
N, M = map(int, input().split())
B = []
for _ in range(N):
    s = input().strip()
    B.append(s)

ks = []
for i in range(N):
    for j in range(M):
        if B[i][j] == "o":
            ks.append((i, j))
K = len(ks)
mcf = MinCostFlow(2+K+N*M)
for i in range(K):
    mcf.addEdge(0, i+2, 1, 0)

for ki in range(K):
    i, j = ks[ki]
    s = (i, j)
    queue=deque([s])
    vs = set([s])
    dist = defaultdict(int)
    while queue:
        u, v = queue.popleft()
#        print(2+ki, (u,v),encode(u,v), (i,j), dist[(u, v)])
        mcf.addEdge(2+ki, encode(u, v), 1, 10**18-dist[(u, v)])
        for nu, nv in [(u+1, v), (u, v+1)]:
            if (nu, nv) in vs:
                continue
            if nu >= N or nv >= M:
                continue
            if B[nu][nv] == "#":
                continue
            vs.add((nu, nv))
            queue.append((nu, nv))
            dist[(nu, nv)] = dist[(u, v)] + 1

for i in range(N):
    for j in range(M):
        mcf.addEdge(encode(i,j),1,1,0)
#print(mcf.G)
print(K*10**18-mcf.minCostFlow(0, 1, K))


Fixed submission:

import sys;input=sys.stdin.readline
from collections import deque, defaultdict
def encode(i, j):
    return 2 + K + i*M + j
from heapq import heappush, heappop
class MinCostFlow:
    INF = 10**18

    def __init__(self, N):
        self.N = N
        self.G = [[] for i in range(N)]

    def addEdge(self, fr, to, cap, cost):
#        print(fr, to, 10**18-cost)
        forward = [to, cap, cost, None]
        backward = forward[3] = [fr, 0, -cost, forward]
        self.G[fr].append(forward)
        self.G[to].append(backward)

    def minCostFlow(self, s, t, f):
        N = self.N; G = self.G
        INF = MinCostFlow.INF

        res = 0
        H = [0]*N
        prv_v = [0]*N
        prv_e = [None]*N

        d0 = [INF]*N
        dist = [INF]*N

        while f:
            dist[:] = d0
            dist[s] = 0
            que = [(0, s)]

            while que:
                c, v = heappop(que)
                if dist[v] < c:
                    continue
                r0 = dist[v] + H[v]
                for e in G[v]:
                    w, cap, cost, _ = e
                    if cap > 0 and r0 + cost - H[w] < dist[w]:
                        dist[w] = r = r0 + cost - H[w]
                        prv_v[w] = v; prv_e[w] = e
                        heappush(que, (r, w))
#            print(dist)
            if dist[t] == INF:
                return None

            for i in range(N):
                H[i] += dist[i]

            d = f; v = t
            while v != s:
                d = min(d, prv_e[v][1])
                v = prv_v[v]
            f -= d
            res += d * H[t]
            v = t
            while v != s:
                e = prv_e[v]
                e[1] -= d
                e[3][1] += d
                v = prv_v[v]
        return res
N, M = map(int, input().split())
B = []
for _ in range(N):
    s = input().strip()
    B.append(s)

ks = []
for i in range(N):
    for j in range(M):
        if B[i][j] == "o":
            ks.append((i, j))
K = len(ks)
mcf = MinCostFlow(2+K+N*M)
for i in range(K):
    mcf.addEdge(0, i+2, 1, 0)

for ki in range(K):
    i, j = ks[ki]
    s = (i, j)
    queue=deque([s])
    vs = set([s])
    dist = defaultdict(int)
    while queue:
        u, v = queue.popleft()
#        print(2+ki, (u,v),encode(u,v), (i,j), dist[(u, v)])
        mcf.addEdge(2+ki, encode(u, v), 1, 10**5-dist[(u, v)])
        for nu, nv in [(u+1, v), (u, v+1)]:
            if (nu, nv) in vs:
                continue
            if nu >= N or nv >= M:
                continue
            if B[nu][nv] == "#":
                continue
            vs.add((nu, nv))
            queue.append((nu, nv))
            dist[(nu, nv)] = dist[(u, v)] + 1

for i in range(N):
    for j in range(M):
        mcf.addEdge(encode(i,j),1,1,0)
#print(mcf.G)
print(K*10**5-mcf.minCostFlow(0, 1, K))