Nick loses head in the sack - that's messed up (7)

I believe the answer is:

botched

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'messed up' is the definition.
('botch' can be a synonym of 'mess up')

I don't understand how the remainder of the clue works.

(Other definitions for botched that I've seen before include "Messed up" , "Made a bags of" , "Made a mess of, spoiled by clumsy work" .)

I've seen this clue in The Independent.

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