It means that someone is extremely stupid that they don't have a functional brain, instead they have shit (meaning nothing) where their brain is supposed to be.
Person # 1: Where the hell is Ray?
Person # 2: I don't know, I don't think he's coming tonight.
Person # 1: He's such a fucking idiot, he's ruining it for me too, I swear he has shit for brains!"
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