Not even deprecated anymore. I believe current Perl has removed it. As of 5.20 (possibly earlier) if you use it:

perl -E '$*=1;'
$* is no longer supported at -e line 1.
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If you want the full explanation of what it used to do, look at an older version of the documentation. 5.8.9 ought to do, and it's available on perldoc.perl.org: http://perldoc.perl.org/5.8.9/perlvar.html:

Set to a non-zero integer value to do multi-line matching within a string, 0 (or undefined) to tell Perl that it can assume that strings contain a single line, for the purpose of optimizing pattern matches. Pattern matches on strings containing multiple newlines can produce confusing results when $* is 0 or undefined. Default is undefined. (Mnemonic: * matches multiple things.) This variable influences the interpretation of only ^ and $ . A literal newline can be searched for even when $* == 0 .