The letters of a Sefer Torah, tefillin or mezuzah must be completely surrounded by parchment on all sides. This halacha, known as mukaf gvil, can be broken down into three points: 1) there must be at least a small amount of space between the edge of a letter and the edge of the klaf, 2) the letters must be completely disconnected from one another, and 3) there cannot be a hole in the klaf surrounding a letter. If the letters were mukaf gvil at the time of writing and only later became connected, the writing is still valid. L’chatchilah, though, they should be fixed.
[שו"ע לב, טו, משנ"ב לד, וביה"ל ד"ה אבל; ביאורים ומוספים דרשו, 60-59]