I've no idea what you want to test in Wanted; the function always returns false. It also assigns to $dir, which you then never use. You also match $dirname against $_ - I do not know why.

Assuming you want a subdirectory of the current directory, the following should do the trick:

use Term::Prompt;
use strict;
use warnings;

my $dirname;
{
    $dirname = prompt('s', 'Enter a dir name',    
                      'e.g. regression-EODDAY1', '',    
                      sub {$_[0] =~ /^[A-Za-z0-9_-]+$/ && -d $_[0]});
    redo unless prompt('y', 'That dir already exists, do you wish to '
+ .      
                            'overwrite the existing contents ?', '[y/n
+]', 'n');
}

# 
# Rest of program here.
#
[download]

Or you may want to rewrite the bare block as a repeat-until loop.