Who knows. Apparently it has something to do with the word "fag" but it doesn't serve any purpose as a real word. The correct context is just to randomly say it in any situation where it isn't expected, I guess.
"I can't believe there were people hitting on me at my mom's funeral. That just seems so offensive, what kind of asshole would do that?!"
"omg. FAGATIVES."
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A euphemism for "fuckshit." Used as an exclamation.
"Holy effshiz!"
"Oh, effshiz."
"Whatever you don't do, don't look at the Holy Effshiz Picture."