Not a corruption, I think, but a euphemism,

A "bugaboo" is an evil spirit. At least one singer along the line is likely to have felt uncomfortable singing about an evil spirit (maybe a demon or You-Know-Whom himelf).

So why not, ur-singer, try to make the song safer? Or safer for children? "Foggy dew" is a little weird, but why not?

Sounds like a dew that forms after fog. Maybe the night is really cold and damp: that could send her into his bed. Good enough!

Everyone presumably knew what "bugaboo" meant. So "corruption" by mishearing or sheer ignorance seems to me unlikely.