Well, this question amounts to - why and when does Shakespeare use prose and not blank verse? People will tell you, in a famous and incorrect generalisation, that prose is reserved for lower class characters and verse for upper class ones. It's not true - and if you need evidence, Mercutio in this scene is the one who speaks the most, in prose. Mercutio is a kinsman of the prince. A high-status, high-class character. In prose.
What does the prose signify then? I think it's got something to do with Shakespeare trying to make things sound colloquial, natural, everyday, like ordinary speech. Particularly for this scene, some boys hanging around in a street, swapping jokes, teasing each other, and talking about their rivals, Shakespeare seems to want to conjure a sort of lazy, casual, colloquial energy. Somehow the prose gives that sort of unpredictable, unpoetic sense.
There's something about the way blank verse, because of its heartbeat rhythm, drives forward a sort of heightened level of energy, with the musical, rhythmic control of poetry. Prose doesn't have this template, and so is that bit less poetic and more unpredictable. And that's just what you want for boys chatting on the street.
Hope it helps!