This is documented in Compound Statements
If the variable is preceded with the keyword my, then it is lexically scoped, and is therefore visible only within the loop. Otherwise, the variable is implicitly local to the loop and regains its former value upon exiting the loop. If the variable was previously declared with my, it uses that variable instead of the global one, but it's still localized to the loop. This implicit localization occurs only in a foreach loop.

The variable does change value within the loop, as you can see with print: 

for $i (1..10) {
  last if $i == 7;
  print "in loop $i\n";
}

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In reply to Re: loop surprise by toolic
in thread loop surprise by morgon

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