Green’s Dictionary of Slang

rug cutter n.

also rugcutter, rug shaker
[cut the rug v.]

(US black) a good and energetic dancer.

[US]Appleton Post-Crescent (WI) 11 May 13/4: Flapper Dictionary rug shaker – A girl addicted to shimmying.
[US]Lil Johnson [song title] Rug Cutter’s Function.
[US]Amer. Mercury July 96: rug-cutter: originally a person frequenting house-rent parties, cutting up the rugs with his feet; a person too cheap or poor to patronize regular dance halls; now means a good dancer.
[US]S. Lewis Kingsblood Royal (2001) 292: The white folks are disgusted with these rug-cutters and slick-chicks that try to act like they’re the same as white folks.
[US]L. Durst Jives of Dr. Hepcat (1989) 8: He shouted on the stroll where the riff masters whispered to the bug to get out of the rug because they were going to jam and jive for rugcutters holiday.
[US]‘Touré’ Portable Promised Land (ms.) 156: We Words (My Favorite Things) [...] Rugcutter. Cocksucker. Showstopper. Hotstepper.