may be set %Var2 $upper(%Var2) | say %Var2 | halt have to be set %Var2 $upper(%Var3) | say %Var2 | halt

but why u unset the variable you can just set it but you can use /var too

where is the condition if (%script) ????

your code can be like this

on *:input:*:{
  if (%script) && ($left($1,1) != /) {
    var %x 1
    while $gettok($1-,%x,32) {
      var %r %r $upper($left($v1,1)) $+ $mid($v1,2)
      inc %x
    }
    say %r
    halt
  }
}