If something is like watching sausages getting made, unpleasant truths about it emerge that make it much less appealing. The idea is that if people watched sausages getting made, they would probably be less fond of them.
If you over-egg the pudding, you spoil something by trying to improve it excessively. It is also used nowadays with the meaning of making something look bigger or more important than it really is. ('Over-egg' alone is often used in this sense.)
Bread and butter, here, indicate the means of one’s living. (That is why we say ‘he is the bread winner of the family’). If a sub-ordinate in an organisation is quarrelsome or if he is not patient enough to bear the reprimand he deserves, gets angry and retorts or provokes the higher-up, the top man dismisses him from the job. So, he loses the job that gave him bread and butter. Hence we say, he quarrelled with bread and butter (manager or the top man) and lost his job.