To angrily abandon something that has become insanely frustrating. It can be a video game, a job, you name it. It's almost always very violent (stuff gets broken, curse words are spoken), and implies very extreme anger issues. Or it could simply be a nice person finally reaching their breaking point.
Nate finally decided to ragequit his job after people started trying to get him in trouble for literally everything he did.
When Khazra ragequits from Empyrean for being muted for 100 years.
Astrazar: ?mute @Khazra 300y
Khazra: *ragequits*
Astrazar: Inappropriate ragequit