It's part of a weird culty religious schism.
Basically, the mischievous youth think that their dead chief rabbi is coming back soon as the messiah and they have to prepare for his return by expanding his synagogue.
It sounds bizarre because honestly it is pretty bizarre.
It's a pretty weird story.
The two important things to add to that is that 1) the rebbe specifically wanted the synagogue expanded, and 2) the people who built the tunnel think the rebbe is the messiah, who is either in hiding until the time is right or is going to be revived at the beginning of the imminent messianic age.