This idiom or expression means:

Slow.
Not smart.

When someone says “He’s one taco short of the combination plate,” they mean “He’s not very smart.”

Also similar:
He’s not all together.
His upper floor is leaking.
He has some loose screws.
He hasn’t got all his buttons.
He has one ore out of the water.
The lights are out on the top floor.
There’s something missing up there.
The upstairs unit has been rented out.