Strange sed substitution removes text

Hi,

Given the input file of three lines:

line 1
line 2
line 3

and the sed script

s/\</\
/g
s/^/hello/

which inserts a newline in front of every word and then prepends the
word "hello" to the beginning of the pattern space.

The following happens:

$ sed -f script.sed input.txt
hello

hello

hello


I was expecting to get

hello
line
1
hello
line
2
hello
line
3

This is a bit surprising since running only the first sed expression
gives (as expected)


line
1

line
2

line
3


The question is, why does the "line N" data disappear when inserting a
word at the start of the pattern space here?

I'm also noticing that this does not happen if a space (for instance)
precedes the escaped newline in the first expression:

s/\</ \
/g
s/^/hello/


This is using sed in the base system on OpenBSD 6.1-stable (amd64).

Cheers,

--
Andreas Kusalananda Kähäri,
National Bioinformatics Infrastructure Sweden (NBIS),
Uppsala University, Sweden.