next unless /\s/;

##</code><code>##

next if $_ eq substr "' . (quotemeta $password) . '", 0, length;

##</code><code>##

[[... beginning of the code as above...]]
print '
  use warnings;
  use strict;
  use List::Util qw(min);
  select STDOUT;
  $| = 1;
  my $chr;
  $_ = "";
CHAR:
  while (defined ($chr = getc DATA)) {
      $_ .= $chr;
      foreach my $n (1..min ' . (length $password) . ', length) {
          next CHAR if substr ("' . (quotemeta $password) . '", 0, $n)
            eq substr ($_, (length)-$n, $n);
      }
      s/' . (quotemeta $password) . '/removed/ig;
      print;
      $_ = "";
  }
  print;
  __DATA__
';
[[... the rest of the code is as above...]]