This incident occurs at the end of Chapter 7, as Boo Radley leaves ever-more interesting and fascinating gifts for Jem and Scout as they themselves become more accustomed to the idea and their fear of Boo Radley as the "bogeyman" diminishes. However, when they find that the hole has been blocked in with cement, it is clear that Jem is troubled by this. Scout reports:
Jem said nothing more about it until late afternoon. When we passed our tree he gave it a meditative pat on its cement, and remained deep in thought. He seemed to be working himself into a bad humour, so I kept my distance.
After Jem has checked whether the tree is actually "sick" or not, as Nathan Radley claimed, and he finds out that according to Atticus the tree was fine, his reactions become stronger. He stays out on the porch until nightfall, and Scout reports that when he entered the house "he had been crying."
What this episode symbolises for the children, and especially Jem, is a passing from childhood to maturity. They are not playing "ghosts" with Boo Radley anymore, but are trying to work out how to communicate with an adult on equal terms through the curious use of the tree. They are coming to value the relationship they are establishing with Boo Radley, and thus when the hole is cemented over, this marks the end of that relationship. Jem responds to this with sadness and tears - a mark of his maturity.