Here's what happens on a Picaxe 28x1 in a project board when you connect pin C.7 to the Reset pin. Check out areas F and H in this photo.
The reset function in a Pic(axe) is made so that when it is pulled low, the chip resets. An on-board 4700 Ω resistor keeps the pin high during normal operation. The little button pulls it down.
This Picaxe really is stuck in a moment and refuses to believe: