Single Ethernet Cable Crashes Network?

I got to work on Monday morning to discover the entire network at one of our branches had crashed. After doing the usual trouble-shooting I still could not find tha cause. Eventually I saw an ethernet fly-lead cable plugged into two seperate ethernet points along one wall, effectively creating a loop in the network connection. When I unplugged the cable, the network started functioning again. Can anyone explain what was happening? I’ve never seen this before.