Bug Tussle is in Cullman County at the intersection of state highways 69 and 91. We didn't find much there. The sign below announcing the Bugtussle Steak House was inviting, but the place was closed, as in permanently. We did stop at the Bug Tussle Marketplace, which has a couple of reviews and photographs on Yelp. Google Earth also shows a Dollar General and a few dwellings near the intersection.
State highway maps list the location as Wilburn (Bug Tussle). Virginia Foscue's Place Names in Alabama indicates Wilburn was the original name of the area, given to it by Charles Sandlin, the first postmaster. A post office operated there from 1903 to 1906. Foscue cites the "general assumption" that Bug Tussle indicates the presence of bugs in the area. However, that pretty much describes all of Alabama.
Note that the address given on the sales receipt below for the marketplace is "Bremen, AL", which is an unincorporated town further north on highway 69 toward Dodge City. Bremen is the location of Cold Springs Elementary and High Schools. According to Foscue, Bremen was originally called Empire when founded in 1860. After his appointment in 1879 the first postmaster James Macentepe changed it to avoid confusion with another town of that name and to honor the German city.
A 1990 Tuscaloosa News article discussing strange town names in Alabama can be found here. That article gives the origin of Bug Tussle this way: an old man climbed a nearby mountain [perhaps Cold Springs Mountain] and thought the movement of people below looked like bugs tussling.
Alabama's town is not the only U.S. Bug Tussle. The one in Texas is also spelled as two words, the ones in Kentucky and Oklahoma are one word. On January 4, 1967, a season 5 episode of the Beverly Hillbillies entitled "Mayor of Bug Tussle" was first broadcast. The Clampett's home state was never specified in that series, but in this episode Bug Tussle is identified as their home town.