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To write a software or document distribution on magnetic tape for shipment. Has nothing to do with physically cutting the medium! "Cutting a disk" has also been reported as live usage. Related slang usages are mainstream business's "cut a check", the recording industry's "cut a record", and the military's "cut an order".
All of these usages reflect physical processes in obsolete recording and duplication technologies. The first stage in manufacturing an old-style vinyl record involved cutting grooves in a stamping die with a precision lathe. More mundanely, the dominant technology for mass duplication of paper documents in pre-photocopying days involved "cutting a stencil", punching away portions of the wax overlay on a silk screen. More directly, paper tape with holes punched in it was an important early storage medium.