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The term is used when referring to a girl that has a loose vagina.
Did you hear that Rachel has a loose goose?
Adj. + Noun A term to describe someone who is so loose that it is no longer comprehensible as to how loose they actually are.
Gary Strudel: Hey Matao! Guess What?
Matao Froond: I'm a loose goose?
Mike Flucker: Yeah you are you loose goose!