It's a dynamic of knowing or not knowing what it is that makes this term funny. If you are in on the joke it is what ever you wanna come up with and improve on the spot and anyone can add to it or give their mystery sauce deep fried nacho cheesed variation. The person who doesn't know a version is joked on because they didnt know.
Skylikeforserious says "What do you mean you don't know what prison oysters are, in SF we deep fry lamb and beef meatballs a put nacho cheese and hint of fennel on them." Ted says "In Albuquerque we do them the same except add peppers n christmas salsa" ...