Your code is likely buggy. You've passed in read-only values to $this->mask_block_params(...) and you have no idea that $` and $' are still valid by the time you use them. Here's an alternate reformulation which also avoids incurring the $`, $&, $' speed penalties. If this is your only use of $`, $&, and $', you may find a nice speed improvement.

while ($this->{template} =~ /$re/) {
    # Uses substr and @-/@+ instead of $` and $'. Also is sure to capt
+ure those values before executing other potentially regex-using code.
    my ( $prior, $start, $close, $after ) =
        = ( substr( $this->{template}, 0, $-[0] ),
            $1,
            $2,
            substr( $this->{template}, $+[0] ) );
  my $params = $this->mask_block_params( $start, $close );
  my $html = &$callback($key, $params);
  $this->{template} = $prior . $html . $after;
}
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