You exit before line 6 is reached - it is executed at runtime. You will get the behavior I think you expect by rearranging,

use strict;
{
    my $var = 1;
    sub test {
        print "var was '$var'\n";
        $var++;
        print "var is now '$var'\n";
    }
}

test();
exit 0;
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The extra braces are just to limit the scope of $var further. Search closure here for much more.

the monastery: (36)