in a nutshell, it means "this is the way its going right now, and thats how it is." kind of a way to say: dont overthink the situation. a reminder to keep things simple, dont overanalyze things, or a way to put a definition on something thats hard to explain.
Friend: "So what's the deal with you and Bobby? I thought you guys were together, but then someone said you broke up, and then somebody else told me you were broken up but 'friends with benefits' So what's the true relationship status?
Girlfriend: it is what it is.