Knickerbockers is an old-school name for panties/underwear worn by the fairer sex. Butch vagitarians sometimes prefer male clothing and will wear men's boxer shorts in place of panties. Hence, 'knickerboxers'.

Craig: Hey man, do you sell boxer shorts?
Jerome: Yeah, over there by the butch chick.
Craig: What's a rugmuncher doing buying shorts?
Jerome: She wears em as knickerboxers, Dude.