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1.
When a friend or otherwise acquintance interjects in your story or anecdote to add a point which is relevant to the story but ruins the whole point of the story.

The phrase is based on the term diplobrat as a person who is a son or daughter of a diplomat, a diplobrat will usually have some experience living in foreign countries and thus has more likelihood to know minor details regarding said country.

However the phrase is not limited to be used by diplobrats only, and can be used by any person of any profession, as long as the interjected point is correct.
Person 1: You have to make a foundation, you know? Like how a second floor in a building is held up by the pillars.
Person 2: Actually the floor is usually held up by supporting beams.
Person 1: ...
Person 2: Diplobratted!

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Person 1: I don't think we understand each other, we need to speak the same language, like how the Chinese people all speak the Chinese language.
Person 2: Strictly speaking the Chinese people do not speak Chinese.
Person 1: Okay, they speak Mandarin, and so wha-
Person 2: And Cantonese - SNAP! Diplobratted!
by Vagn March 05, 2012