The very short (and incomplete) explanation is this:

some_block_creating_statement_like_if_or_sub {
  my $session = ....;

  # do stuff with $session

  some_other_block {
     # $session is available here
  }

  # end of block
}

# $session will be out of scope here.
# so it won't be available and if it's not passed to
# some other variable that is available here it will
# be gone, and the telnet session will be closed.
[download]

See also perlfaq7's "What’s the difference between dynamic and lexical (static) scoping?"