Green’s Dictionary of Slang

1. to segregate, to have a segregationist policy.

1967		Time 13 Oct. 19: [They] won office even though their Democratic opponents ‘outsegged’ them.
1970		Manchester Guardian Weekly 4 Apr. 14: [He] acquired a reputation as an effective administrator, and, most important, he has no intention of being ‘out-segged’.

2. (N.Z. prison) to place an inmate on segregation.

2001

D. Looser Boobslang [U. Canterbury D.Phil. thesis] 161/1: seg v. to place in segregation, to segregate an inmate from the mainstream prison population.