I knew it as a version of "letting a salesman have a foot in the door".
The camel asks to come in, the merchant lets him in by degrees and through negotiaton, and eventually finds himself out in the cold. This story is about removing someone from a favoured position or a position of power.
The phrase is along the lines of if a camel gets a nose in, his body will follow.
Which I now can see as having a very different meaning!
Both interpretations are true in my experience.
I admit I've suffered in the former, but in the latter understanding I have NEVER let the camel anywhere that wasn't of my definite choice
