The etymonline website tells me that hobi or hobyn originated from Anglo-Latin in the 14th or 15th century.
It meant ‘horse’. No surprises there!
Our two more modern versions are from the early 19th century. Probably referring to a wooden or wickerwork toy figure, or a costume in a dance (such as Morris dances).
Today, ‘hobby’ can mean either:
1) a child’s hobbyhorse (stick with horse’s head, or a rocking horse). I can remember happy times galloping on my hobbyhorse when I was a very little girl. Then there’s the shortened version of this word resulting in ‘hobby’, meaning:
2) a spare time activity or past time, for pleasure and recreation, (From Macquarie Compact Dictionary 2017)