I somehow remember seeing it in the perldocs, but not sure where.

What's happening is that the snippet is literally injected into a loop (see perlrun)

}{ is just closing the loops body and opening a block to pair with the old end.

Nota bene that using BEGIN and END blocks have similar effects but are probably easier to read.

update

from perlrun#*-n*

-n

causes Perl to assume the following loop around your program, which makes it iterate over filename arguments somewhat like sed -n or awk:

      LINE:
        while (<>) {
        ...        # your program goes here
        }
[download]

...

BEGIN and END blocks may be used to capture control before or after the implicit program loop, just as in awk.