A slightly more specialized usage is to point out the fact that a person is being intentionally misleading for the sake of humorous effect. The usage itself is also intended to be humorous and reciprocating.
This term can also be used to express general discontent, discomfort, or disapproval.
Etymology: This word is likely an amalgam of the words "falcon" and "bit" as used in the medieval art of falconry. If one were "bitten" by his/her own falcon, the person was considered to be untrustworthy or incompetent and referred to as "falcon bit". This "mark" typically stayed with someone for their entire life. The phrase was later severed from its connection with falconry and eventually coalesced into one word and was generalized to mean anything of questionable integrity.
Melissa: "Well, I think it's falconbit."
2. Ashley: "So, why didn't you show up last night?"
Jessica: "Oh, I met Brad Pitt for drinks and a little... late night fun!"
Ashley: "That story is totally falconbit Jessica!"