The name "Faulebutter" first appears in a lease record from 1690. There is no definite explanation for the name.
Since a Low German dialect was spoken here in former times, one must look for the explanation in the dialect. "Faul" might have to do with "Pfuhl", swampy pond, or with something outdated colloquial the "Pfühlen", the soft bed(stuff). Butter could be derived from "soil". Soft boggy soil, this could be a logical explanation for the place name, because the terrain is somewhat boggy due to the soil conditions and the altitude.