The following is from https://ws.engr.illinois.edu/sitemanager/getfile.asp?id=540 , [U of I] Department of Computer Science, Alumni News, Winter 2001, Vol 2 No 7, page 14. Judy Tolliver editor. The winning google search was "illinois.edu" molly guard ibm button.
Mollyguard? - Ed Krol explains
Ed Krol explains the origins of the word Mollyguard, which dates back to 1982, like this: “I was concerned with the Cyber [mainframe], and right behind the Cyberconsole was an IBM 4341—a nondescript, singularly unimpressive, desk-sized grey machine. The only thing about it was that on one side was a big red switch—kid-sized, about 2 inches wide. The switch was like the emergency OFF switch, and if you pulled it you actually had to call an IBM engineer to come in and reset it. There was some crisis on the Cyber, and I was babysitting that day, and so I took my daughter Molly in to work with me. I said, ‘You play with your trucks on the floor while I work,’ and she saw this amazing big red thing and gave it a yank and turned it off. You weren’t supposed to do that to those big machines at the time. Our computer center director then had little plexiglas flaps installed so that you had to lift the flap up before you could pull the switch. Charley [Kline] named them Mollyguards to protect them from Molly. It was a funny play on words, too, because molybdenum is a slippery element and there used to be a grease called Molygard.”
Krol, BS 73, is now assistant director of CCSO, and Kline, BS84, MS 86, who was a student hourly at the time, is now principal research programmer at CCSO. Molly Krol is a senior at Luther College in Iowa.
It was Kline who submitted the word Mollyguard to the Jargon File, a collection of computer slang from various technical cultures begun by Raphael Finkel at Stanford in 1975. Here is how it appears on this list, mirrored on many Web sites:
molly-guard /mol’ee-gard/ n.
[University of Illinois] A shield to prevent tripping of some Big Red Switch by clumsy or ignorant hands. Originally used for the plexiglass covers improvised for the BRS on an IBM 4341 after a programmer’s toddler daughter (named Molly) frobbed it twice in one day. Later generalized to covers over stop/reset switches on disk drives and networking equipment. In hardware catalogues, you’ll see the much less interesting description “guarded button.” n