To smoke; figuratively, to smoke or stink through fear. I was in a cursed funk. To funk the cobler; a schoolboy’s trick, performed with assafœtida and cotton, which are stuffed into a pipe: the cotton being lighted, and the bowl of the pipe covered with a coarse handkerchief, the smoke is blown out at the small end, through the crannies of a cobler’s stall.
Definition taken from The 1811 Dictionary of the Vulgar Tongue, originally by Francis Grose.
See also the definition in Nathan Bailey's 1736 dictionary of canting and thieving slang.
To Funk * FurmenNathan Bailey's 1736 Dictionary of canting and thieving slang
John S. Farmer's collection of canting songs and slang rhymes