If the capture works, I'd use:

sub replace {
    my($text, $pattern, $replacement, $global) = @_;
    my $result = $text;
    if ($global) {
       $result =~ s/$pattern/$replacement/eg;
    } else {
       $result =~ s/$pattern/$replacement/e;
    }
    return $result;
}

my $y = replace($x, qr/\b(\w)/is, '"\U$1"', 1);
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Keep in mind the 3rd argument is arbitrary Perl code instead of a string literal. It used to be able to include arbitrary Perl code, so nothing's new on the (lack of) security front.

If you really do want the options and/or regexp to be a string, I'd use my previously posted solution.