Something pleasant which draws attention from a situation which could be awkward or embarrassing for those involved. Distraction cake originated in British teen dramedy "Skins" where Emily Fitch produced a delicious chocolate cake, seemingly from thin air, in order to remove attention from Naomi Campbell who was being heckled about her sexuality - presumably as an act to show her undying love.
Cook: I know the cure
Naomi: The cure for what?
Cook: It's my cock
Naomi: What the hell are you talking about?
*Awkward glances and laughter*
Emily: Hey look what I made! (Produces delicious distraction cake)