This is another old term you don’t hear much anymore. It came from the beginning days of recording. Edison probably came up with it. When studios started working with magnetic tape it was absolutely critical to have a clean recording to go to the record plant to make the Stampers that in turn made vinyl albums.
When recording in the studios from the 1940’s to the early 1970’s (mono and first 2-track tape machines) recording was hard work. All of the musicians and singers had to record at the same time (live recording).
The engineer would have a splicing block mounted on or near the tape machine and if there was even one mistake by anyone, the engineer would take a razor blade and cut the tape and roll that section of tape into the garbage can. Then everyone would do the song over again until it was right. Again, it was critical to have a clean master tape. So tape was never recorded over; it was thrown out.
In those days musicians had to have talent beyond belief. Studio time plus the cost of tape was so expensive that you had to have someone who really thought your music would sell to pay for it. You had to have the songs down with no mistakes before you went in the studio (You didn’t practice in the studio). Another term that was common at this time was `Single Takes’. The best musicians could do a song one time without having to do it over. Most studios would let you do a song over four times, then they would tell you to go and come back when you knew what you were doing.
Now for an interesting thing about all of this: a lot of engineers and musicians that were just getting started in the business would take a job as the janitor at the studios and would take empty reels and carefully splice leader tape and wind the tape out of the garbage on to them and take them home. This is where a lot of boot leg records came from. Hence the term on bootleg records that the record was made from `Out Takes’.