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1.
Used when describing something of authentic origin. Also conversely used for describing an item of excellent merchantable quality.

In some cases, it is safe to apply when describing an object or being that has attained a level of respect that many have sought to achieve.
Example 1 -

Sam: Bro! I just bought a new phone!

Adam: Fuck! Hand me that Bad Sally immediately!

Sam: This Bad Sal' right here?

Adam: That Bad Sally right there.

Example 2 -

Rob: Yo, my dog turned seventeen the other day.

Nathan: Dude! That thing is still alive? What are you feeding that Bad Sally?!
by YeahBordyIsSoFine October 09, 2013