This might not be the most elegant way of doing it but it works.
Also, I added a lot of extra stuff to account for odd situations, for example: when you have a partial loop of faces that suddenly changes direction (like an "L").
The point of all this was to integrate it into a bigger context sensitive tool that splits/subdivides your selection with a single edge loop and selects it (regardless of what your initial selection was) and that I can call with a single hotkey.
Next step... Modal operator!
Here it is:
import bpy, bmesh
context = bpy.context
ob = context.edit_object
me = ob.data
bm = bmesh.from_edit_mesh(me)
sel_mode = bpy.context.tool_settings.mesh_select_mode[:]
vert_sel = [v for v in bm.verts if v.select]
edge_sel = set(e for e in bm.edges if e.select)
face_sel = set(f for f in bm.faces if f.select)
if sel_mode and len(face_sel) > 1:
#Store the selected loop of faces as an edge ring
contained_edges = edge_sel - set(e for e in bm.edges
if e.select and (e.is_boundary or not all(f.select for f in e.link_faces)))
#Store the border loop of edges as well
border_edges = set(e for e in bm.edges if e.select)
#We're have to do some extra stuff just in case we only selected a partial loop of faces
#or a partial loop that changes direction
for e in contained_edges: e.select = True
#Extend and store the full ring because (contained_edges) is missing the first and last
#edges of the ring if you only selected a partial loop of faces
ring_edges = set(e for e in bm.edges if e.select)
#Extending the full ring gives us some corner edges we dont need if we changed direction so lets get them!
bpy.ops.mesh.select_mode(use_extend=False, use_expand=False, type='FACE')
bpy.ops.mesh.select_mode(use_extend=False, use_expand=False, type='EDGE')
corner_edges = set(e for e in bm.edges if e.select).intersection(border_edges)
#Update our ring edges. Still just in case we had a partial loop of faces
ring_edges -= corner_edges
#Lets just create a new Set at this point and do everything we need in one line. It works though!
final_ring_sel = (border_edges.intersection(ring_edges) - corner_edges).union(contained_edges)
#Subdivide the final ring
new_edges = bmesh.ops.subdivide_edges(bm, edges=list(final_ring_sel), cuts=1)
#Select the new edges we created and extend the loop because there's a missing edge
#whenever we have a corner
for e in new_edges['geom_inner']: e.select = True