In Puerto Rico, the meaning of pendejo is much stronger. It refers to a guy who is "pussy-whipped" to use the crude expression, or to a guy whose wife whores around in front of him; or to a husband who puts his wife out on the street to earn a little extra money. I've never heard it used in a jocular way, although it is relatively common as an expletive, like carajo ( = hell).

More than likely, the use of the word starts a fight where one man is defending his honor and the other is just trying to get away. I once saw two very elderly men attempting to fight in the park after one of them called the other a pendejo. They were so infirmed that they both were holding onto the park bench to remain upright and swinging with the other hand. It was hardly likely that the "pendejo" had a living wife and, if she were alive, it would be highly unlikely she'd take on a lover for any reason. But the word is so emotionally charged that its use was reason enough to start an altercation.

I have it on fairly good authority that the word originally meant pubic hair, but I've never been able to confirm that in a dictionary.