The Aussie way of talking shit about someone or saying someone thing bad about someone
Jessie keeps bagging someone out, she needs to be nicer, what did they ever do to her?
The object in question is approaching a point of inevitable failure.
A car approaches, smoking, rattling and is obviously going to break down.
Dude 1: Dude, that car sounds awful!
Dude 2: Its hanging its bag out!