It normally means "Away from keyboard," meaning that the person is not currently on the keyboard and focusing on the screen. There is a deviation to this. If you are playing Valorant, AFK means "At the f*ckin keyboard," meaning that the person is about to kill you and you need to stay focused.
(All) DefinitelyNotSmurfing: Afk
(All) penguins: AFK
And then you get sniped.