I know this is a minor nit and doesn't address your actual question, but I find this style of including the C code (or whatever) to Inline::C to be easier to read and maintain (example untested, but basically using your original code in OP),

use Inline (
    C           => 'DATA',
    BUILD_NOISY => 1,
    clean_after_build => 0,
    warnings => 10,
);

# perl stuff

# more perl stuff...

__DATA__
__C__
#include <stdio.h>

// checks if array is indeed an arrayref and sets array_sz to its size
+ and
// returns 1 else returns 0 (not an array)
int is_array_ref(
    SV *array,
    size_t *array_sz
){
    if( ! SvROK(array) ){ fprintf(stderr, "is_array_ref() : warning, i
+nput '%p' is not a reference.\n", array); return 0; }
    if( SvTYPE(SvRV(array)) != SVt_PVAV ){ fprintf(stderr, "is_array_r
+ef() : warning, input ref '%p' is not an ARRAY reference.\n", array);
+ return 0; }
    // it's an array, cast it to AV to get its len via av_len();
    // yes, av_len needs to be bumped up, it's $#array
    int asz = 1+av_len((AV *)SvRV(array));
    if( asz < 0 ){ fprintf(stderr, "is_array_ref() : error, input arra
+y ref '%p' has negative size!\n", array); return 0; }
    *array_sz = (size_t )asz;
    return 1; // success, it is an array and size returned by ref, abo
+ve
}

int func(
    SV *inp,
    SV *out
){
    AV *av, *av2;
    size_t i, j, asz;
    if( is_array_ref(out, &asz) ){
        printf("Case1: @out\n");
        // we have an \@R, e.g. func(\@R)
         av = (AV *)SvRV(out);
        // but first clear any contents
        if( asz > 0 ) av_clear(av);
    } else if( SvROK(out) ){
        printf("Case3: \\$out\n");
        // we have a scalar ref, e.g. func(\$x)
        av = newAV();
        sv_setsv(SvRV(out), (SV *)av);
    } else {
        printf("Case2: $out\n");
        // we have a scalar e.g func($x);
        av = newAV();
        sv_setsv(out, (SV *)av);
    }
        // and fill it in
    for(i=0;i<5;i++){
        av2 = newAV();
        av_extend(av2, 3);
        av_push(av, (SV *)av2);
        for(j=0;j<3;j++){
            av_store(av2, j, newSViv(42));
        }
    }
    return 0; // success
}
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