I interpreted it to mean that if you tolerate deviant behavior, then you'll likely tolerate even more (increasingly) deviant behavior, but just how much you'll tolerate is unknown, until it's too late and things are out of hand.
It means that when you tolerate minor crimes you are enabling acceptance of more major crimes. So in some sense the answer is "yes." By tolerating graffiti you are in some small way tolerating an environment which tolerates murder.
It means that if people sense that a place is lawless, they will act lawless.
It's called the 'broken window' theory. It basically says, if some kid walks by an old factory with busted out windows, he's likely to throw a rock to break another window. If it's clean, and it's windows are in tact, he isn't likely to throw a rock at the window.
Rudy took this theory to heart, and as Mayor of NY, made a big point of arresting 'squeegy men', men who would 'wash' your window (usually making it dirtier) when you were stopped at a stoplight, demand money, and kick your car and spit at you if you didn't pay. He had them cited for jaywalking, and it turns out, most of them already had warrents out for their arrest for other things. People speculated that there were hundreds of these guys in NYC at one point, because they seemed to be everywhere. Ends up it was less then 100 guys.
Anyhow, his actions solved the problem literally overnight. It took less then 2 months. This was seen by many people as the start of the transformation NY has undergone since.
If a city tolerates graffiti, or stile jumping in the subway, etc, then people get the idea that those little things are acceptable and things a little more serious are acceptable. It is a progression. A city that tolerates graffiti is regarded as generally lax and people don't report things that they know will get no response from the law. People with the scofflaw mindset are much freer in their attitudes and activities and people who are comfortable doing the little crimes have much less aversion to doing the badder crimes. Really it is a matter of drawing of a line and is not well heeded. A line anywhere below the top is hazy and constantly moves. Only a line at the top is sharp and bright. Great numbers of people don't recognize much difference in quality between petty crimes and major crimes. "I'm not doin nothin no worse than everybody else!"