Green’s Dictionary of Slang

(UK Und.) a knife used for cutting purses.

1591		Greene Second Part of Conny-Catching in Grosart (1881–3) X 111: The young stripling stalkes me out of the Tauern, and feeling if his Cuttle boung were glibbe and of a good edge, went to this meale-man to enter combate hande to hand with his purse.
1608		Dekker Belman of London H1: He that cuts the Purse is called the Nip. [...] The knife is called a Cuttle-bung.
1610		Rowlands Martin Mark-all 37: A Cuttle bung, a knife to cut a purse.