If I add logic to the main program to exit the while loop before the subprogram has finished, the subprogram does not get terminated early.

use strict;
use warnings;

#1176332

my $cmd_1 = "perl 1176332p2.pl";  # (renamed from OP's hello.pl)
 
open (CMD, "$cmd_1 2>&1|") or warn ("!!! Can't run program: $!\n");
my $start = time();
printf "Started at %s\n",$start;

while (my $line = <CMD>)  {
  print "->" . $line;
  if (time() > $start + 2) {
    printf "Stopping at %d!\n",time();
    last;
  }
  if ($line =~ m/^xyz/) {
    print "\n Pretending to do some string manipulation\n";
  } else {
    print "(from $0): Nothing yet | ";
  }
}
close CMD;
printf "Actually stopped at %d\n", time();
[download]

H:\perl>perl 1176335.pl
Started at 1479848254
->Hello World from 1176332 PART 2
(from 1176335.pl): Nothing yet | ->Sleeping 10 seconds
(from 1176335.pl): Nothing yet | ->.
(from 1176335.pl): Nothing yet | ->.
(from 1176335.pl): Nothing yet | ->.
Stopping at 1479848257!
Actually stopped at 1479848264
[download]

The main program does not return control to the command line until 7 seconds later, not until the subprogram has terminated on its own.