I fixed this by changing the div clone_hidden id to something unique
<script type="text/javascript">
var count = 0;
$("#content").on("click", "#newchosen", function() {
count++;
$("#clone_hidden").clone().attr('id','clone'+ count +'').appendTo($("#cloneoutput"));
$("#clone" + count +" select").chosen({disable_search: true, width: "150px"});
});
</script>