I remember reading about "vendor" branches in the cvs documentation (probably in the early 2000s), which if I recall correctly were trying to solve a similar problem to sub-modules in git. So I don't think the Rubyists invented the term.
That's where I first read the term, but it predates svn. As far as I know, it's been the common term for committing external dependencies to your own VCS for as long as there's been such a thing as a VCS.
