It took me a while to figure out what was going on. Here's my program:

#!/usr/bin/perl

$ARGV[0]="test";
$^I="";
undef $/;
while(<>) { print STDOUT "hello\n" }
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$/ seems to work correctly, reading to the end of the file if set to undef. However, by setting $^I to the null string, Perl seems to think it is running as if at the command line. the "while(<>)" reads from the file named "test", but the print statement writes to that same file. I find that without STDOUT, file test is erased and filled with a single "hello". Using the STDOUT filehandle, the file is erased and set to 0 bytes. Do you see the same activity?

What I don't get is by keeping the same program as above but inserting $^I=undef; just before the print statement inplace editing does not seem to get disabled, i.e. the file is overwritten anyway.