To decorate or furnish with tassels; to trim or adorn with hanging ornamental threads or cords.
From 'be-' (making the verb intensive/perfective) + 'tassel' (from Old French 'tassel,' meaning clasp or fastening, evolving to mean the decorative object itself). The verb emerged as tailors and craftspeople needed words for their decorating work.
Tassels were serious business in historical fashion—they showed wealth and craftsmanship—so 'betasseled' garments announced 'I can afford unnecessary decoration,' which is literally what luxury still does today.
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