Green’s Dictionary of Slang

rug cut v.

also rug
[cut the rug v.]

to dance; thus rugcut, rug-cutting n. and adj.

D. Burley Chicago Defender 19 Oct. 14: Psychic Aspects of Rugcutting [...] the egrossing art of ‘cutting rugs’ (i.e. any type of dancing in which much sweat exudes and little is added to the purse).
[US] ‘Hectic Harlem’ in N.Y. Amsterdam News 8 Feb. sect. 2: RUG CUTTIN. – Participating in low-brow affairs [...] RUG CUTTIN’ SESSION. – A low brow party.
[US] ‘Sl. among Nebraska Negroes’ in AS XIII:4 Dec. 317/1: To rug is an indefinite term, meaning to engage in a number of pleasing activities.
[US]Flash! (Wash., D.C.) 21 Feb. 11/1: rug cut — A newly coined expression describing the apparently savage machination of the latest edition of the revision of the popular ‘Lindy Hop.’.
[US]F. Swados House of Fury (1959) 46: I want to have some fun before I get old, do some rugcuttin’ an’ go out with the boys.
D. Burley N.Y. Amsterdam Star-News 26 Apr. 13: Jimmie’s Chicken Shack jumped on all fours after the rugcuts were over.
[US]D. Burley Orig. Hbk of Harlem Jive 28: The cats grabbed the chippies, and St. Mick forgot, / And began some rug cutting, to music most hot. [...] Then he copped a quick trot to the smoke-hole once more, / As the Cats and the Chippies cut rug to the floor.
[US]L. Uris Battle Cry (1964) 27: Friday night rugcutting sessions to Glen Miller records.
[US]San Diego Sailor 65: Bud was doing a little restrained rug-cutting.
‘Elvis Costello’ Unfaithful Music 254: My bizarre attempts at rug-cutting in the ‘Pump It Up’ video.

In derivatives

rugger (n.)

(US black) a dancer.

D. Burley Chicago Defender 19 Oct. 14: ‘Ruggers’ [...] ‘chop and demolish carpets’ in the middle of the floor.