When you are fucking someones butthole and shit spews out onto your nutsack.
I was with this girl last night, and she totally got mud on the bag.
the act of wiping ones arse in the direction of the nutbag, hence covering the sack in poo
similar to mud flaps (feminine)
friend: hey joe, whats that smell?
mudbagger: sorry buddy, i just did some heavy mud bagging.
As a form of fore play one carrys around a quart sized zip-loc bag full of thier lovers poop.
Person 1: Why do you smell like a dirty booty?
Person 2: Oh, it's my Mississippi Mud Bag. I am in to that type of thing you see.