it means either to distance yourself from something you are dependent on, or other meaning which is to act however you like with no restrictions
Cut Loose
distance oneself from a person, group, or system by which one is unduly influenced or on which one is overdependent.
"they cut loose from from the factory and started their own"
act without restraint.
"consumers want to cut loose and have secret bacchanals"
The terms are extrapolating the idea of releasing tension or cutting tension on a rope. Imagine a rope holding a ball up, suspended, then the rope is cut and the ball drops, that ball was "cut loose"
