A "kissing cousin" is any cousin that is not a first cousin. In most places in the world, first cousins may not have sex and have babies. But, in most cultures second cousins, and higher can have sex and babies. Degree of cousinship is determined by how many generations the shared ancestor is removed from the individual closest to the generation of the shared ancestor.
If we share the same grandparent we are first cousins, and therefore should avoid physical encounters with each other which might lead to sex. First cousins are NOT "kissing cousins." If we share the same great grandparent we are second cousins and are therefore able to kiss and do whatever we want, including having sex, and have babies together.
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.