1. When you fuck up by accident and realize your mistake.
2. When you're smoking out of a pipe, joint, blunt, etc. and you burn your lip/ tongue.
Friend 1: "Damn dude, I was talking to this one chick and I called her by my ex-girlfriends name!" Friend 2: "Damn, you really bit the flame."
"Watch that pipe. It gets really hot, wouldn't want you to bite the flame.