I'm pretty sure that using a reference to an integer as the record separator is strictly a byte oriented operation. At least the following still reads one byte at a time (though length reports 1 character as expected):

my $string = chr(400);
print length($string),"\n";
local $/=\1;
open FH, "<", \$string or die $!;
while (my $byte = <FH> ) {
  print "<$byte>\n";
}
close FH;
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