The 1984 Macintosh Filing System had a special attribute called the "bozo bit". If this bit was set, the file would be ignored when a user copied the disk, folder or the file itself in the Mac Finder. It was a simplest form of copy protection. Anyone with the slightest technical savvy could fix it, but bozo's would fall for it. Thus a person "setting the bozo bit" had the double meaning that this person could be ignored (like a copy protected file), or a person falling for what this person said was a complete bozo (neophyte). The term Bozo likely goes back to an old TV show, Bozo the Clown.