What does `never argue with a fool, people may not know the difference` mean?
The expression means that a fool's statements will illustrate to others that he is indeed a fool, but to argue with him will make you appear foolish as well. Thus bystanders will see two fools.
A similar saying is "never argue with an idiot, lest he pull you down to his level and beat you with experience." The meaning here is, a fool/idiot/rube always speaks crudely or rudely or simply, without facts or logic, so if you throw away the rules you usually follow, you will be on unfamiliar ground, and your opponent will not.