To hold off or the attempt at convincing someone to hold off on acting out on someone else....particularly in an aggressive, forceful, intimidating or exploitative manner.
Deebo approaches Craig, Smokey and Red. Deebo starts asking Red for money. Craig sensing a tense situation, attempts to convince Deebo to spare Red since Deebo already has $200.
A variation of "you've got to be kidding me," or "spare me." When something you don't want to happen/can't believe is happening, happens. Can be used in the positive or the negative.