One 'problem' with reading input in 'paragrep' mode (i.e.,  $/ = "") is that a seemingly blank line that has any other whitespace in it (e.g.,  "\n \n") is not recognized as being a repeated newline. A repeated newline, and therefor a paragraph break, exactly matches  /\n\n+/ only.

BTW: I get the same printed output from  `cat file` as kennethk.