local varables exist only with in the script there running in...

means you cant refrence them from anywhwre else....

Thats why there is a /SET and a /VAR command
/SET global varables
/VAR local ones

but anyway...

/testme {
var %word who what where
unset %word
echo >>> %word <<<
}

result of running /testme
>>> <<<

So i dont know what you did to your copy of mirc but it isnt running right!