Let $P =\left \{ A_{1}, A_{2} \cdots A_{n} : A \in \mathbb{R}^{3}\right \}$ (where $A_{0}=A_n, A_{1}=A_{n+1})$. By middling of a point $A_{i+1}$ we mean setting it's value to a rectangular projection of that point on the line $A_iA_{i+2}$. We middle every point of $P$ and start the process again ... ad infinitum. Decide whether all points of $P$ will be collinear after a finite amount of steps.
I came with this myself, please be kind.
Convergence looks to be (it's not a mathematical proof!)
towards a point when points $A_i$ are smoothly spaced (i.e. with distances $A_kA_{k+1}$ of the same order of magnitude (Fig. 1).
towards a line, indeed, as you have assumed it, when there is large gap between two points. (Fig. 2).
Fig. 1: Viviani's curve, in black (intersection of a sphere and a certain cylinder) shrinks into almost a dot after 300 iterations, with graduated colors, the last ones being more reddish. Only one out of ten of these curves have been plotted.
Fig; 2: The case of a helix with three periods (in black, with connected endpoints). Here, after 500 steps, this still intermediate stage (in red) in the form of a bow with its string displays a trend to a limit which would be approximately the line segment connecting the initial endpoints.
Matlab program: