What happens
The Capulet feast is in full swing. Capulet, in expansive host-mode, welcomes the guests. Romeo, masked, sees Juliet across the room and stops being able to think about Rosaline. Tybalt recognises Romeo's voice as a Montague's and goes for his sword; Capulet stops him, calls Romeo a "virtuous and well-govern'd youth," tells Tybalt to leave it. Tybalt swears revenge and storms out. Romeo crosses to Juliet and they share what is, structurally, a sonnet — speaking it together, kissing twice. The Nurse breaks them up. Each, separately, asks the Nurse who the other is, and learns the other belongs to the enemy family.
Why it matters
The first conversation between Romeo and Juliet is a fourteen-line sonnet they share. He starts; she finishes the quatrain; they collaborate on the couplet. The audience doesn't need to hear the meter to feel it — it's the rhythm of two people effortlessly finishing each other's thoughts. After a play that has so far been about people who can't agree (servants, fathers, the city), Shakespeare gives us two strangers who agree on every line. This is what love sounds like in this play. It sounds like collaboration.
Tybalt's confrontation with Capulet is a small, important domestic-political moment. Capulet — calmer, older, the head of the house — tells Tybalt to stand down, and Tybalt obeys, but only on the surface. Tybalt's promise that "this intrusion shall, / Now seeming sweet, convert to bitt'rest gall" is the seed of Act 3 Scene 1. Shakespeare is showing you that Tybalt won't let go even when his own family head tells him to. The grudge is now bigger than its supposed leaders.
The discovery scene at the end is the play's first real twist of the knife. The audience gets it before the lovers do — they're enemies before they're lovers. Juliet's response, "My only love sprung from my only hate," is the play's whole thesis in a couplet. The earlier scenes were the world being set up. From here, the world is a problem the lovers have to live inside.