Hobbet, a Scottish word for a thief or a laughing-stock (OED), which O'Brien notes might "echo Bilbo's occupation of thief and his somewhat whimsical [.
In fact, though unnoted by O'Brien, variants of this word--hobbit, hobbet, hobbett--appear with striking regularity across the nineteenth century once one starts looking for them.
If at Wrexham, by the hobbet of one hundred and sixty-eight.
So common was the term, in fact, that hobbet seems to have been a default example for anyone complaining about the lack of standards in weights and measures, beginning as early as 1790 (73 years before the OED's earliest citation), when Sir John Riggs Miller complained before the House of Commons about "the capricious, absurd, and irrelevant names and proportions of the weights and measures which custom, folly, or knavery, have introduced into our dealings":
whom I cannot identify with certainty) in Notes and Queries, hobbet appears again:
It is in the etymology for hobbet in particular--which, like much of the foregoing, O'Brien did not discuss--that we can begin to speculate more directly on the possible connections between the word and Tolkien's hobbits.
Regarding the etymology of hobbet O'Brien notes only that he could not confirm the language of origin but thought it "irrelevant" regardless (34).
dialectal hobbet is an adaptation of the Welsh] noun.
If he had done so, however, he would have found it: the Welsh word for "a measure of corn, beans, &c," is included not under the OED headform hobbet but under the familiar (to us) Tolkien spelling hobbit.
If Tolkien would have had any interest at all in the word hobbet, therefore, we might naturally presume that he would also have familiarized himself with both the definition and etymology of hobbet from his old haunt, the OED.