Yes, and what happens if $version is the only line within funny.txt? 'n' does not signify a numerical value. It's a literal frikkin n! and it means, as quoted from the mIRC help file (if only you had kept reading):
If the n switch is specified then the line read in will not be evaluated and will be treated as plain text.
What exactly does that mean? Well, I suppose it means that any text you read using
$read(text.txt) may be evaluated as
code, rather than
plain text! You didn't even read the definition of the function:
$read(filename, [[color:#FF0000]ntswrp], [matchtext], [N])[/color]