Danger, don't use \b if you want to detect the edges between spaces an nonspaces. It won't work for nonspace+nonword characters, like quotes and punctuation.

Perhaps replace the \b(.*?) with (\S.*?).

Still, you're not running this with warnings enabled, are you? Both $1 and $2 are optional, so both can be undef, but you use their value regardless. This runs without warnings:

s/^\s*?((?:\S.*?)?)\s*?(\n?)$/$1$2/gm;
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