I'd write that function like this:

  def absolute_path(path):
      if not path.startswith('/'):
          return '/' + path
      return path

This way you don't have to keep track of mutating the path variable. I do find that more readable - it's clearer that there are two paths through the code. That said, this example is trivial enough that I'd probably do it with an inline if/else statement, although still probably not a lambda:

  def absolute_path(path):
      return path if path.startswith('/') else '/' + path

This way it's more obvious at a glance that you're defining a function. It's easier to follow someone else's code if they generally adhere to standards, and Python is a very convention-oriented language.