Someone with a penis ("chub") hidden up their anus ("to smuggle"). Used to imply a person's sexual orientation in a derogatory way, inferring that they are not masculine.
Look, he runs like a girl. We don't want that chub smuggler on our team!
A person (usually female) who appears attractive at first glance, but is discovered later to be slightly to rather overweight depending on how effectively she is chubsmuggling. This can be accomplished with clothing, optical illusions, magic, and impaired or inebriated initial observation.
A: Yo, check HER out!
B: Take another look bro, she's a chubsmuggler.