To give a beat-down, administer an ass-kicking, or otherwise do physical injury to someone.
Archaic Meaning: In the 1970s, term used in male prisons to describe the initial forcible sodomizing of an inmate in order to make him into a "prison bitch." See the 1980 movie Penitentiary, in which the prison jock "Jesse" unsuccessfully tries to rape the prisoner called "Too Sweet" by the jocks, telling Too Sweet that "I'm gonna bust yo ass, I'm gonna bust you." The beating into submission of the intended "prison bitch" was preliminary to busting his ass open by and for sodomy. The beating phase became separated from the rape phase in the current meaning of "bust yo ass."
Jesse to Too Sweet in Penitentiary (1980): You my stuff, Sissy! I'm gonna bust yo ass!
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.