This is a combination of the terms "fish" - meaning fishy, sus - and "shlay" - which is a variant of slay. This contradiction of good and bad causes this expression to convey "something that is so bad that is good."
Raymart: Did you guys hear Enzo's pick-up line? It was big fish.
Sherwin: I think it was so fish that it was fishlay-o-fish.
Sherwin: I think it was so fish that it was fishlay-o-fish.
by TigerTerp February 2, 2022