Automator action to run python script on series of files fails in Catalina
Running python scripts in shell scripts seems to work for me. Does the script have executable flags set?

Also, is there any reason you're using a shell script to pass the arguments to the python script, and not just embedding the python script in the Action?

You can set the 'Shell' drop-down value to /usr/bin/python, to use the bundled system python; or you can just use #!/usr/bin/env python at the start of your script.

Automator will even help you out by offering:

import sys

for f in sys.argv[1:]:
    print f


to get your arguments into your script.