In this example, $item ... wasn't going to used outside of the loop, it should have been declared inside of the loop so that it was destroyed (and the memory it uses freed) when the block exits.

You raise a valid point, but perhaps chose an inappropriate example. Particularly when a block is the body of a loop, you should weight the cost of creating and destroying a loop-scoped lexical variable against the need to keep the memory from being tied up. In this particular (obviously contrived) example, I might leave $item scoped outside the loop if I knew the loop would execute many times, just to avoid the create/destroy cost in terms of execution time and memory fragmentation (which itself might cost execution time later in the program, by slowing down subsequent allocations).

dmm

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