Based on my limited understanding local $/ = undef when used inside an innermost block of the smallest scope possible is acutally perfectly fine. If you just say $/ = undef in a global scope, then you can run into problems with other IO - usually when some other modules your using are doing IO. This is because $/ is a global variable.

Also be aware that localising a variable doesn't preserve its value into the localised copy; the localised copy is undefined. As this example crudely demonstrates:

c:\WorkingFolder>perl -e "$/ = 5; print qq{$/\n};  {local $/; print qq
+{$/\n}; $/ = 2; print qq{$/\n};} print $/"

__END__
Output is:
5        #initally set $/ to something we can see when we print it
         #2nd print, proves localsised $/ is set to undef
2        #localised copy of $/ set to 2
5        #inner scope where $/ was localised has ended. Original $/ is
+ reinstated by Perl
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