Output changes when I put my code into a function

I have the following code:

#include<iostream>
#include <string.h>
using namespace std;
int main(){
        char str[100], str1[100];
        cin>>str>>str1;
        char c[strlen(str1)], flag[strlen(str1)];
        int i, j, k = 0;
        for (i = 0; i < strlen(str1); i++) {
            flag[i] = 0;
        }
        for (i = 0; i < strlen(str); i++) {
            for (j = 0; j < strlen(str1); j++) {
                if (str[i] == str1[j] && flag[j] == 0) {
                    c[k] = str[i];
                    k++;
                    flag[j] = 1;
                    break;
                }
            }
        }
        if (k != 0)
            cout<<c;
        return 0;
}

It gives the correct output(first line is the input):

hello world
lo 

But it requires to be put inside a function func() when I put the code in a function, such as this -

#include<iostream>
#include <string.h>
using namespace std;
char * func(char * str, char * str1){
    char c[strlen(str1)], flag[strlen(str1)];
    int i, j, k = 0;
    for (i = 0; i < strlen(str1); i++) {
        flag[i] = 0;
    }
    for (i = 0; i < strlen(str); i++) {
        for (j = 0; j < strlen(str1); j++) {
            if (str[i] == str1[j] && flag[j] == 0) {
                c[k] = str[i];
                k++;
                flag[j] = 1;
                break;
            }
        }
    }
    if (k != 0)
        return c;
    return NULL;
}
int main(){
        char str[100], str1[100];
        cin>>str>>str1;
        cout<<func(str,str1);
        return 0;
}

The output comes like

hello world

Note that the second output line contains an ASCII character What is the mistake in here? Can't I return a string array like this?