++I0! Minor changes to remove the start/stop markers which I think was desired:

# The golfish way:
    $text =~ s#(\s)\s+|STARTPRESERVE(.*?)STOPPRESERVE#$1$2#gs;
    # Update:  Oops!  This fails if a run
    # of whitespace doesn't start with ' '.

# or, if you don't like warnings:
    $text =~ s#\s{2,}|STARTPRESERVE(.*?)STOPPRESERVE#
      defined $1 ? $1 : " " #seg;
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(:

        - tye (but my friends call me "Tye")