He is an ugly and distorted Mario clone that appeared in Casino, Cards and Chaos. When Mario was using a slots machine and got three Mario heads, this clone emerged from the machine as a prize. Hobo Mario was apparently looking for Princess Daisy. Later, Mario used him to distract King Bob-omb.
He makes a small appearance in R64: A Theatre Mario. Where Mario used him as a decoy in his place at the movie theatre but was blown up after Peach realized he wasn't the real Mario.
Hobo Mario is based on a model from The Simpsons Game, which is a gnome-like figure which is a parody of Mario.
Hobo Mario appears in the Enter the Cheatrix episode of The Simpsons Game.
It is unknown whether there is more than one Hobo Mario, and by extension, whether the same Hobo Mario appeared both times. This is because there may be several such Mario clones used as prizes. The fact that one caused an explosion with Daisy only confounds things further.
In The Grand Hotel Mario episode, Hobo Mario uses Herbert's voicelines from Family Guy.