When $. == 1,

      while ($count<=$size){
              rand($.)<1 && ($line=$_);
            print OUT $line;
            $count++;    
            }
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is the same as

      while ($count<=$size){
            $line=$_;
            print OUT $line;
            $count++;    
            }
[download]

because rand(1) always returns something less than 1. Therefore, you always print the first line $size times.

And when it comes time for $. == 2, $count is greater than $size from the first pass, so the loop is never entered.

There's nothing you want to happen to a line more than once, so there shouldn't be any nested loops. The inner while is probably suppose to be an if.