No, it is not broken. I tested with this piece of code on windows 2000 server, and worked:

use IO::Socket::INET;
use strict;
use warnings;

my $s = new IO::Socket::INET(Proto => "tcp", LocalPort => 3000, Timeou
+t => 2);
while (1) {
    my $c = $s->accept();
    print time, "\n";
}
[download]

And this is what I got:

1069176374
1069176376
1069176378
[download]

BTW, even if you use level socket calls, you still can set timeout by calling setsockopt, check this out under perlfunc. There are couple of timeout related settings, for example SO_RCVTIMEO and SO_SNDTIMEO.