# If you'd like to omit non-matching lines from the result; add ';d' to the end of the expression.
sed -E 's/^(\s{1})(\s)(\d*)(\s)*(.*?)\n((\s{2})(\d)(\s*)*(.*?)\n)/#$3# $5\n$6/g;t' <<< " 1 MASS
2 BLOCKCOUNT
3 SECTOR
4 SYSTEM
SECOND DISPLAY BLOCK REGEX COMMAND
[REPLACEFIRST]^(\s{1})(\s)(\d*)(\s)*(.*?)\n((\s{2})(\d)(\s*)*(.*?)\n)[WITH]#$3# $5
$6"
Please keep in mind that these code samples are automatically generated and are not guaranteed to work. If you find any syntax errors, feel free to submit a bug report. For a full regex reference for SED, please visit: https://www.gnu.org/software/sed/manual/html_node/The-_0022s_0022-Command.html