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A person who is embarazado is an English speaker who has embarrassed himself or herself by failing to correctly use a foreign language.
The term comes from the way an English speaker might try to say that they are embarrassed in Spanish: Estoy embarazado, which actually means "I am pregnant" — especially embarrassing when spoken by a man. While the word embarazo means both "pregnancy" and "embarrassment" in Spanish, the latter is largely a literary use.
See also Wienerschnitzel, False friend, Engrish.