It's note #021, on page 384. For those who don't have TCR #10, here's part of the note:

"The practice of making "repairs" to known canceled or damaged chips has become both pervasive and perfected. The value code for a "repaired" chip has been nominally increased by $25 to reflect the "value added" to the chip. For example, a modified condition would apply when a drill-canceled chip has been "repaired". This repaired (modified) chip may be easily mistaken for one graded and valued quite differently."

Here is a post reflecting the position of the CC & GTCC BOD on altered/modified chips:
http://www.ccgtcc.com/cgi-bin/mb/webbbs_config.pl?read=17605

"The Board feels that these practices will cause considerable harm to the hobby."

The BOD has officially stated the opinion that the repaired/altered/modified chips will harm the hobby, but TCR puts a higher value on an altered chip than on an unaltered one. Seems to me that the higher value will "encourage" further "repairs".