How to use python socket.settimeout() properly

The timeout applies independently to each call to socket read/write operation. So next call it will be 20 seconds again.

A) To have a timeout shared by several consequential calls, you'll have to track it manually. Something along these lines:

deadline = time.time() + 20.0
while not data_received:
    if time.time() >= deadline:
        raise Exception() # ...
    socket.settimeout(deadline - time.time())
    socket.read() # ...

B) Any code that's using a socket with a timeout and isn't ready to handle socket.timeout exception will likely fail. It is more reliable to remember the socket's timeout value before you start your operation, and restore it when you are done:

def my_socket_function(socket, ...):
    # some initialization and stuff
    old_timeout = socket.gettimeout() # Save
    # do your stuff with socket
    socket.settimeout(old_timeout) # Restore
    # etc

This way, your function will not affect the functioning of the code that's calling it, no matter what either of them do with the socket's timeout.

The timeout applies to each call to recv().

A) simply use your existing timeout and call recv(to_receive) - I.e. Try to receive all the data in one recv call - in fact I don't see why you shouldn't use this as the default way it works

B) No nothing bad could happen, but any other code which uses that socket needs to be aware of handling timeout.

On your existing code, shouldn't the recv() call be recv(max(4096,to_receive-received)) - that way you won't unintentionally consume any data which follows after the to_receive bytes.