In Perl, or is a shortcircuiting operator. That is, the first operand is evaluated, and if-and-only-if it is false, the second is evaluated. &process($element) or die will call your subroutine and if it returned false, the script will die.

So, what does the subroutine return? Without an explicit return, subroutines return the value of the last statement, in this case, the return of close $OUTFILE. close returns a false value on error, so your close failed.