same case, tried fiddling around with it and the documentation seems wrong.

it says

                                   If there is no filehandle
  (previous item), then this subroutine is expected to
  generate one line of source code per call, writing the line
  into $_ and returning 1, then returning 0 at "end of file".
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but this is never the case, passing undef doesn't help.

The "previous item" always has to be a filehandle.

Otherwise the generator-callback "this subroutine" is never called.

Passing a dummy filehandle helps.

update

DARN! looking at this example Re: Cancel/no-op a require reveals the problem with the documentation.

In the hook you can either return FILEHANDLE, CODEREF; or return CODEREF; but the docs imply return undef, CODEREF; for the second case.