To 'mug someone off' when they believe to be 'mugging you off' first.
When someone tries to make you look foolish or put you in a embarrassing situation, that person is trying to 'mug you off'. The 'undermug' is where you are aware of this 'mugging' and counter act it with your own 'mugging' unbeknown to the original 'mugger'.
It is said of the situation where a person has the bad luck to make contact with his testicles against an undefined surface or object, intentioned or not.
Given the nature of the word, it is more appropriate to design cases where the interaction is made with a moving object, for example, a ball.
Although it is extremely painful for the victim, it tends to be considerably funny to people who witness it.
Today in the baseball game the pitcher took a nutshot; the baseball hit him in the nuts.
Man, I just watched the funniest nutshot video ever.