Book 8 includes this multi-chapter episode in the life of a man ("Jack") who goes primarily by the nickname of the "Man of the Hill." (In our "Detailed Summary," we call him the MotH for short). The MotH tells Tom that, many years before, he went to London with no money and a bad reputation waiting for him at home. Without good references or any options for a job, he fell into thieving and conning people.
The Man of the Hill has only found redemption from his criminal ways by returning to his father's house and meditating on classical literature and the Bible. He has had to remove himself entirely from society, since his life among the people of the city was so terrible and traumatizing that he never wants to go back to it.
The placement of the Man of the Hill episode in the novel just as Tom is flailing around trying to decide what to do next (before he misses Sophia at the inn at Upton and resolves to find her in London) is definitely significant. There are elements of his story that are close to Tom's: the MotH abandoned his family home in shame; he traveled to London; and he even fought against the Jacobites, as Tom wishes to do.
But the MotH also serves as a warning: if Tom isn't careful, he could follow the MotH's example when he faces the sins and temptations of London life. Luckily, Tom's tale goes off in a very different direction than the MotH's.