#!/bin/bash
# First 4 occurrences:
echo 'one two three four five six seven' | \
  sed 's/[^[:space:]]*/\n&/g;:t;/\n/{x;/.\{4\}/!{s/$/./;x;s/\n[^[:space:]]*/TEST/;bt};x};s/\n//g'

nl='
'; sed "s/[^[:space:]]*/\\$nl&/g;:t${nl}/\n/{x;/.\{4\}/!{${nl}s/$/./;x;s/\n[^[:space:]]*/TEST/;bt$nl};x$nl};s/\n//g" <<< 'one two three four five six seven'