Connor, the big hockey star who Jace is sometimes envious of because of his "abilities" with the women, began to tell Jace something as a confession. Jace was assuming that he was telling him he was an alcoholic, but Connor was really trying to tell Jace that he is gay. One night Connor slept in Jace's suite with him in the opposite bed, and Jace began to fall asleep.
Jace was having a dream that him and Kate were making out, when he woke up to Connor on top of him with no close on kissing him. Jace jumped up and began yelling and swearing at Connor. He then realized what Connor was trying to tell him. Connor also confessed that he thought Jace was gay, which is why he hung out with him so much. Jace was very insulted and began thinking "do other people think I'm gay?" which they did. His aunt Mara told Jace it's fine just don't tell his mom at that moment, and even Kate told him later that she thought he was gay too, which is another reason why she felt bad for kissing him.
If you had a good friend like how Connor was to Jace, would you feel betrayed knowing that your friendship was based on a hopeful future gay relationship? How would you react to a friend who confesses their true self, thinking that you feel the same way towards him?