Looking at the code, as soon as you encounter "shared", you increase $depth by one. But as soon as you see any directory in home it will skip the first case of your if because the $depth is not the original depth, and will subtract from $depth. So while you're exploring "shared", $depth keeps on bouncing back and forth.

It gets more complicated if you visit 2 special directories in a row. In your case you visit /shared/ITReg and add to $depth, but that is the last /shared/* directory. Therefore when you enter /home, $depth decreases by one and you get /home rather than subdirectories.

The solution is that rather than trying to manipulate a global $depth as you walk the tree, within each invocation of &wanted calculate $depth from first principles.