This seems somewhat simpler, though you might want to strengthen the regex to validate the input more.

#! perl -slw
use strict;
my $data_stg
    = 'junk text update 8923 mark complete update 8324 mark '
    . 'complete more junk update 5438 and 5843 and 1522 mark '
    . 'complete update 8435 and 9323 mark complete true junk'
;

$data_stg =~ s[update (.+?) mark complete]{
    join ' ', map{ "update $_ mark complete"} split '\s+and\s+', $1
}ge;

print $data_stg;
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