$ foo()
{
bar ()
{
echo I am bar
}
}
$ bar
bar: not found
$ foo
$ bar
I am bar
Pretty much the same thing as the Ruby example.
This is simply because function defining is a kind of statement or expression with a side effect which must be evaluated. The side effect is global (a name is globally associated with a function). So if the side effect is in a function body, its evaluation is delayed until the function is called, and then its effect is still global.
If you're a sufficiently advanced Unix purist (aka a Plan 9 user), the Bourne shell is a violation of Unix principles. Contrast the v6 shell, where this construct is impossible because there are no functions. Now that's do-one-thing-do-it-not-quite-terribly.
This is indeed the basic feature of any language that's evaluated at runtime. When working with such a language, one needs to learn the program as a dynamically growing construct instead of a vision cast in stone when you press the "compile" button.
Or rather, one needs to learn which constructs destructively manipulate a global environment, and which perform lexical binding.
In Python, an inner def will lexically bind a function, creating a closure. Python is not less dynamic than Ruby.
In Common Lisp, a defun inside a defun will behave similarly to Ruby; but if you want lexically scoped local functions, you use a different operator, namely flet or labels.
Scheme has a define which is lexical: it brings a lexical identifier into the scope for forms which follow.
Lexically scoped items, even in a dynamic language, in fact can be "cast in stone when you press the compile button"; they are cast in that stone which is the entire compiled environment of the surrounding function.
Bash:
Pretty much the same thing as the Ruby example.This is simply because function defining is a kind of statement or expression with a side effect which must be evaluated. The side effect is global (a name is globally associated with a function). So if the side effect is in a function body, its evaluation is delayed until the function is called, and then its effect is still global.