A mug bet is one which has no offer attached to it and often no value to the punter.
These are used for fun and to keep betting accounts open – they can still be laid off at the exchange to manage risk.
Sometimes there is no market at the betting exchange so the only option is to “mug” the bet if you feel (or calculate) that there is value in the odds that have been offered by the bookmaker. This can be termed Mugging for value.
“Only two things are infinite, the universe and human stupidity, and I’m not sure about the former”Albert Einstein