As a conjunction, it connects two ideas that contrast, like 'I was tired, but I kept going.' As a preposition, it can mean 'except,' as in 'everyone but me.'
From Old English 'butan' meaning 'without, outside, except.' It developed from a combination of 'be-' (by) and 'utan' (out). Over centuries, its use narrowed into the contrast and exception meanings we use today.
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