$_ getting clobbered by inner loop.

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      1 #! /usr/bin/perl -w
      2
...
     12
     13   print "Ending processing of file, $_.\n";
     14 }

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Starting processing of file, test1.txt.
Line 1 from 'test1.txt'
...
Line 3 from 'test2.txt'
Use of uninitialized value in concatenation (.) or string at ./test.pl
+ line 13, <TEST_FILE> line 6.
Ending processing of file, .

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Line 1 from 'test1.txt'
Line 2 from 'test1.txt'
Line 3 from 'test1.txt'

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Line 1 from 'test2.txt'
Line 2 from 'test2.txt'
Line 3 from 'test2.txt'

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