A variable modified inside a while loop is not remembered

Question

In the following program, if I set the variable $foo to the value 1 inside the first if statement, it works in the sense that its value is remembered after the if statement. However, when I set the same variable to the value 2 inside an if which is inside a while statement, it's forgotten after the while loop. It's behaving like I'm using some sort of copy of the variable $foo inside the while loop and I am modifying only that particular copy. Here's a complete test program:

#!/bin/bash

set -e
set -u 
foo=0
bar="hello"  
if [[ "$bar" == "hello" ]]
then
    foo=1
    echo "Setting \$foo to 1: $foo"
fi

echo "Variable \$foo after if statement: $foo"   
lines="first line\nsecond line\nthird line" 
echo -e $lines | while read line
do
    if [[ "$line" == "second line" ]]
    then
    foo=2
    echo "Variable \$foo updated to $foo inside if inside while loop"
    fi
    echo "Value of \$foo in while loop body: $foo"
done

echo "Variable \$foo after while loop: $foo"

# Output:
# $ ./testbash.sh
# Setting $foo to 1: 1
# Variable $foo after if statement: 1
# Value of $foo in while loop body: 1
# Variable $foo updated to 2 inside if inside while loop
# Value of $foo in while loop body: 2
# Value of $foo in while loop body: 2
# Variable $foo after while loop: 1

# bash --version
# GNU bash, version 4.1.10(4)-release (i686-pc-cygwin)

Answer 1

echo -e $lines | while read line 
    ...
done

The while loop is executed in a subshell. So any changes you do to the variable will not be available once the subshell exits.

Instead you can use a here string to re-write the while loop to be in the main shell process; only echo -e $lines will run in a subshell:

while read line
do
    if [[ "$line" == "second line" ]]
    then
        foo=2
        echo "Variable \$foo updated to $foo inside if inside while loop"
    fi
    echo "Value of \$foo in while loop body: $foo"
done <<< "$(echo -e "$lines")"

You can get rid of the rather ugly echo in the here-string above by expanding the backslash sequences immediately when assigning lines. The $'...' form of quoting can be used there:

lines=$'first line\nsecond line\nthird line'
while read line; do
    ...
done <<< "$lines"