Using the Chess example, the way a chess engine is "smart" is it can look ahead a bunch of moves, and see all the possibilities.

The way you make that "dumber" is you limit the number of moves the engine can look ahead.

To make it more general, you limit the thing that makes it "smart". Sometimes it's as simple as limiting input, see the chess example, sometimes it's more complicated, sometimes it's just adding a wait or a random element. Or a combo of the above.

In addition to this, OP seems to assume that an "optimal choice" is always an option. In reality, it can be really really hard to make a good AI, so the chess AI you're playing against might actually be "doing its best", because whoever made it couldn't make it any better.

That highly depends on what task you want to "dumb down".
On your chess example, if the pc calculates all possible moves, let it calculate less moves.
If it compares the current game to other gamers played by pros, give it less games as comparison.

Yep.

To go back to the chess example, as chess isn’t a solved game, it’s impossible to always determine the most optimal move in chess. Computers can do lots of complex math to calculate what it thinks is most optimal, but it can never be known for certain.

Computers are dumb to begin with. They do exactly what we tell them to do. If I want a chess engine to not pick the optimal move every turn, I just tell it not to. A chess engine will think of several possible moves and rank them from best to worse. I can program it to pick only its third best option for instance to make an easier opponent.

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There aren’t “like 20,” there are exactly 20 lol

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Add delays to its reaction time, have it make decisions that are clearly not optimal, have it calculate less far into the future as to not understand the consequences of the current moment

One of my first systems Computer Science classes, my professor began with, “Computers are Stupid”

And because of this, one more option is to explicitly limit the amount of time the computer has to "think."

This option is both subtle and powerful. To use the chess example once again, the likelihood of a "missed brilliancy" is not a lot lower than that of an ignored blunder. Perhaps somewhat lower, since the brilliancy may have already been discovered in a prior move, but if I'm forced to think fast, the likelihood of errors increases a lot.