I think it's in large part advanced social skills. If the Sally-Anne test is Theory of Mind 101, street smarts, I think, is Theory of Mind Level 201 and higher, being able to guess someone's perspective and intentions pretty quickly without them necessarily being like the stereotypical good guys or bad guys in a children's show, knowing when to take them seriously and not (e.g., whether they're joking, sarcastic, or lying), and having the "common sense" to handle a social situation well (use tact, avoid conflict in certain situations, etc.) And the notion that book-smart people are often not street-smart probably comes from a long-lasting intuitive cultural awareness of HFA/AS NLD, PLI, and the like, basically a lot of people on the Broad Autistic Phenotype, who are relatively slow compared to your average person at learning these kinds of social skills. As someone who is not autistic but could be considered on the broad autistic phenotype (aloof personality and pragmatic language issues in childhood), I wonder if I might have developed my intellectual abilities as almost a compensation for having trouble learning stuff like street smarts and common sense. I couldn't pick up what hugs and lies were all about when I was little, but I could pick up on words and information and reading.
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Right planet, wrong country: possibly PLI as a child, Dxed ADD as a teen, naturalized citizen of neurotypicality as an adult