Part of the problem is the miscount of the (commented) curly braces in lines five and six:

006: #{
007: #}{

Note also that the problem version runs correctly when written with slashes rather than curly braces:

use strict;
my $abcd = "Hello how r you?";
my $hello="Hello";

$abcd =~ s/\w/

    #{
    #}{
     if ($hello)
       {"1"}
    else
       {"0"}
/exgs;

print "$abcd \n";
[download]

Output: 11111 111 1 111?

The capability of using alternatives to slashes in regexen is, at least as I understand it, to make the notation more readable. For me, at least, your use of curly braces makes it more difficult to read, particularly given their use for a quite different purpose within the substitution.