In the second part of this scene, Don John approaches Don Pedro and Claudio after Benedick exits. Don John tells them that Hero is disloyal (unfaithful). In other words, he is claiming that Hero is having a sexual affair. In order to prove his words, Don John invites Don Pedro and Claudio to join him outside Hero's window so that they can see the proof for themselves. Of course, the audience already knows that the couple in Hero's room that night will be Borachio and Margaret. But it will be dark, and Don Pedro and Claudio will be some distance away from the window. Moreover, they will hear Borachio call Margaret by Hero's name. Don Pedro and Claudio will readily believe that Hero is in her own room and is having a relationship with Borachio. Don John's plan will be successful.
The gullible Claudio, in fact, is already half- convinced by the lie. He exclaims the following:
If I see anything tonight why I should not marry her, tomorrow, in the congregation where I should wed, there will I shame her. (103-05)
So, once Claudio sees Hero with Borachio, he intends to publicly humiliate her. He intends to bring dishonor to her and to her entire family. The aristocrats and the gentry (people of high social standing) considered honor to be more valuable than money. To lose one's honor, then, was a horrible fate.