Protrude downward, as in The dog's tongue was hanging out, or The branches hung out over the driveway. [c. 1400]
Display a flag or sign of some kind, as in They hung out the flag on every holiday. [Mid-1500s]
Reside, live, as in I've found a place downtown, and I'll be hanging out there beginning next week. [c. 1800]
Spend one's free time in; also, loiter, pass time idly. For example, They hung out around the pool parlor, or They spent the evening just hanging out. [Slang; mid-1900s]
hang out with. Keep company with, appear in public with, as in She's hanging out with her ex-boyfriend again. [Slang; second half of 1900s] Also see the subsequent idioms beginning with hang out; let it all hang out.