“Coconut Headphones” refers to the story of some Melanesian Islanders after World War II who had created a cult around the strange foreigners (the U.S. Military) whose planes had recently come from the sky and brought supplies (while they were fighting the Japanese). Supposedly, after the war ended and the U.S.’s forces left, these “Cargo Cult” adherents imitated U.S. Servicemen by constructing runways, making their own headphones, waving in nonexistent planes, and so on, in the hopes that planes would return with supplies.
Although the Wikipedia entry on this refers to “Wooden Headphones”, there are numerous versions of the story on the Internet that refer to them as “Coconut Headphones”. Amazingly, some islanders are still at it.
Used in the context of SEO, “Coconut Headphones” is simply another way of saying “Tinfoil Hat”.
Because the search engines give so little direction (because they don’t want their algorithms taken advantage of), much of SEO involves wild guessing about cause, effect, and correlation. In some respects the SEO community, particularly with regard to various long-held articles of faith that there is a consensus around, resembles one massive Cargo Cult.