That's better than my code yep, like this you catch a last case that I was missing: a file without any \n. Your code is basically the same as this, but probably don't hurt if you add a last small else only to caught this cases and help in future reviews

while (<>) {
     if ($_ =~ m/\S\n{2}\S/){
          s/(\S)\n{2}(\S)/$1\n$2/gs;
          print;
     }
     elsif ($_ =~ m/\n{3,}/){
          s/\n{3,}/\n\n/gs;
          print;
     }
     else {print;} # do nothing (when you have 0 or 1 \n) 
}
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