The code snippit does not loop infinitely, regardless of loop body. As stated, the result is in $1. It then becomes trivial to write a test program to see how it works. In fact, I'll take care of it for you.

use strict;

my $text = "This is a long line that I am typing to demonstrate".
           " the way that my regular expression works and it's a".
           " run-on sentence too but I don't really care.";

print $1, "\n" while($text =~ /(.{0,20})\s+/g);
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Has a slight problem of not grabbing the last line, but it's 99% of the way there, and besides, that's why you should use a module in the first place:)