Originally meant to mean "laughing out loud", it's now become what your side hoe or main will say when you try to be funny but she doesn't find it that way. It can be taken as an insult, as it means you're not funny enough for an emoji or a long "haha". Can also inexplicitly mean to try harder with your jokes.
Her: I had a hot dog for lunch
You: Did it come with a side of obesity?
Her: Lol
Her to her friend: At least he tries....