The former example was much easier for me to understand than the latter, even if it wasn't factored well. But I'm assuming that the functions aren't mucking about with global state or something equally distasteful.
Given that, I have to say that I, err, and I'm sorry if this sounds a little arrogant, but I don't really believe you when you say that it's easier to understand. It might be easier on the eyes, sure, but to really understand how the first one works, you'd have to look into all the defined helper functions, and see which outer-scope variables they touch (global/module/class scope), and also, probably, have some knowledge of where x is called. In a style closer to the second example, there are less outside dependencies.
Of course, this is all very abstract. I'm not saying there aren't cases where a few variables in global (or class) scope that get mutated by bare functions can't work at all, but as a rule I don't consider it a good style.
Even just seeing a few variables or objects passed around, I still don't know exactly what it's doing, or hiding. I can more quickly understand the high level idea with the former example without the details potentially confusing me.
I think it depends on the type of code and how you interact with it. A library that requires its consumer to keep track of a bunch of data and pass it in and out at the right times when it could just as well handle internally is not a very good library. But if we say that all the code the above example is from an application, where a normal change might involve touching all of the mentioned functions, making it explicit where some variable is used.
There's not much else for them to do, since they don't take arguments, but to muck about with global state and/or have side effects.
It seems fairly obvious to me that either the former example is waaaay simpler or it is doing something really distasteful.