Does changing $0 destroy %ENV or does perl copy the environment out of the way before reusing the original environment block?

No, that happens very early, so even BEGIN blocks have %ENV correctly filled, and in any case later changes to %ENV are not reflected in /proc/PID/environ. That file is more like a historical record of what the environment was when the process started, and as such, it has potential (if marginal) uses, and that's why this bothers me.