Ugly is used as an expression of how DISGUSTING and not normal something is. People use ugly for situations when your friend does something so stupid that you can't even describe it in any other way other that yelling out UGLY!!! You can also use it as a pronoun to replace a person (dude, friend, my dude...ect.)
"YOU STOLE YOUR BROTHER'S GIRL??!! THAT'S SO UGLYYY"
"eyy ugly, i got to spill some ugly ass tea"