rails 3.0.9 problem with setting $1, etc. vars on h'd text

gistfile1.rb

    ruby-1.9.2-p136 :057 > def linkify_it(txt)
    ruby-1.9.2-p136 :058?>   safe_text = ERB::Util::h(txt)
    ruby-1.9.2-p136 :059?>   safe_text.gsub(/(^|\s)(https?:\/\/([^\s\/]*)\S*)(\s|$)/i) {|m| puts "safe txt: match '#{m}', $1 '#{$1}', $2 '#{$2}', $3 '#{$3}', $4 '#{$4}'"}
    ruby-1.9.2-p136 :060?>   txt.gsub(/(^|\s)(https?:\/\/([^\s\/]*)\S*)(\s|$)/i) {|m| puts "unsafe txt: match '#{m}', $1 '#{$1}', $2 '#{$2}', $3 '#{$3}', $4 '#{$4}'"}
    ruby-1.9.2-p136 :061?>   end
     => nil 
    ruby-1.9.2-p136 :062 > linkify_it(a)
    safe txt: match ' hTTp://google.com ', $1 '', $2 '', $3 '', $4 ''
    unsafe txt: match ' hTTp://google.com ', $1 ' ', $2 'hTTp://google.com', $3 'google.com', $4 ' '
     => "try thisit is fun" 
    ruby-1.9.2-p136 :063 > a
     => "try this hTTp://google.com it is fun" 
    ruby-1.9.2-p136 :064 > linkify_it("try this hTTp://google.com it is fun")
    safe txt: match ' hTTp://google.com ', $1 '', $2 '', $3 '', $4 ''
    unsafe txt: match ' hTTp://google.com ', $1 ' ', $2 'hTTp://google.com', $3   'google.com', $4 ' '
     => "try thisit is fun"