'bandy' (in 'bandy-legged') ultimately derives from Old English/Germanic roots related to bending (compare Old English 'bendan' 'to bend'), combined with 'legged' to describe the condition of the legs.

'bendan' (Old English) > Middle English forms such as 'bandien'/'bandy' (meaning 'bent' or 'crooked') > adjective form 'bandy' + 'legged' produced the compound 'bandy-legged' used in Early Modern English.

Originally related generally to being bent or curved, the compound came to refer specifically to legs that curve outward (the modern meaning 'having bow-shaped legs').