$rawconfig =~ s{
<location \s+ (\S+?)>
(.+?)
</location>
}{
    ReformulateLocation("$1", "$2");
}gimsex;

print $rawconfig;

sub ReformulateLocation {
    my( $loc, $con ) = @_;
    my @pairs =  $con =~ m{ ^ \s* (\S+) \s+ ([^\r\n]+?) \s* $}gmix;
    dd( { $loc, \@pairs } );
    return "<location $loc> $con </location>"; ## no change
}

__END__
{ "/" => ["MaxConnPerIP", 12, "NoIPLimit", "image/*"] }
{ "/location2" => ["MaxConnPerIP", 0] }
{ "/location3" => ["MaxConnPerIP", 0] }

<IfModule> ## workaround of some kind
<IfModule mod_limitipconn.c>
    <location />
        MaxConnPerIP 12
        NoIPLimit image/*
     </location>
    <location /location2>
        MaxConnPerIP 0
     </location>
    <location /location3>
        MaxConnPerIP 0
     </location>
</IfModule>
[download]

Based on both the feedback I did the following -

#!/usr/bin/perl -w

use strict;

my $location ="/newlocation";
my $file_name ='ipconn.conf';
$/ = undef;
open (FILE, "< $file_name") or die $!;
my $file = <FILE>;
close FILE;
my $value;
# check for the block we want
if ($file =~ m/\<Location\ $location.+?\<\/Location\>/s){
    my $block = $&;
    if($block =~ s/MaxConnPerIP\s*(.+?)*/MaxConnPerIP 10/g) {
        print $block;

    }
}
[download]

Now the issue I have is $block has the updated text and $file has the entire file. How do I merge those , by merge meaning either remove the matching block and add this new one. Or change my value into the original variable which has the file. Which is part of the reason I was leaning on using tie::file, updating the file was so much more easier. Let me know what you guys think. Thank you for your help.

Maybe use ReformulateLocation to perform the location based substitution?

:D