It's the part $\ = "\n"; which messes it up. (Why) do you need it? (I'd also suggest you use the JSON::XS module for JSON parsing.)
I just tried with a similar configuation (freshly compiled Perl 5.28.1, PadWalker 2.3, Eclipse 2019-06), and it works for me. Is the error displayed for any code or something very specific (the error may have to do with unusual content of variables to be dumped)? Any clues if you "Enable debugger console (experimental)" in Preferences > Perl? (The additional console will become available from the Debug view when you relaunch the debug configuration.)
Ouch, I now see that you mentioned Perl 5.6 - this is 18 years old by now... Yes, you should use a more recent Perl version.
You are probably in wrong directory. You're supposed to "cd \Projects\Perl.metadata.plugins\org.epic.perleditor\perlutils" first and then run the "C:\Perl\bin\Perl.exe" perltidy params < sourcefile.pl from there.
Try running that comand line yourself from the cmd.exe prompt, after changing to the working directory mentioned in my first reply and piping the source file to be formatted as standard input. It may be that perltidy is aborting for some reason, perhaps because of the content of your source file. Does it work with other ("Hello world") files?
Try specifying an aboslute path to Perl executable in Window > Preferences > Perl. Check workspace/.metadata/.log if it contains more details about why the exectuion failed. What's supposed to happen when you invoke the Source > Format function is that the command line you quoted as failed is executed in working directory workspace/.metadata/.plugins/org.epic.perleditor/perlutils/perltidy - into which the perltidy version shipped with EPIC is extracted beforehand.
Ok, I changed the code in 0.7.7 to rely on :raw and on the Encode module. I also discovered and hopefully fixed more bugs with transfer of non-ASCII values or variable names from perldb into the "Variables" view and another one with signalling truncation of large (>64K) values...
I added this fix - binmode($DB::OUT, ':encoding(UTF-8)') rather than binmode($DB::OUT, ':utf-8') to EPIC 0.7.6 now. The automated tests seem to be still working. Can you test if this new version installs and works ok for you? Note that EPIC 0.7.6 now requires at least Java SE 7 to execute (so don't upgrade if you must stay with Java SE 6.0).