Butt-o refers to the way a person smells. Typically, the smell is like feces or a very similar odor.
"Dude, you smell like shit! instead Dude, you smell like butt-o" "Did you wipe? You smell like poop. instead Did you wipe? You have butt-o" "Go take a shower I can smell your ass from here. instead Your butt-o is making my eyes water, go take a shower"