When you cum in your underwear and it dries up and when you peel it off, it hurts your dick. It can also be used as a insult.
Example 1:
Guy 1: Dude, I got a jizz blister last night. That shit hurt.
Guy 2: Damn, that sucks bro. I hate jizz blisters.
Example 2 (insulting):
Guy 1: Hey, fuck that dude.
Guy 2: Yeah, heâs such a fucking jizz blister.