an expression used most often in situations where a group of young attractive girls allow an over weight male of the same age into their circle of friends. this male is most often considered the "funny guy", has a large tolerance for consuming alcohol, is great at parties and is always "there for" these girls, as he sees the relationship as a window to getting his dick wet. these girls will tell the boy that he's funny, will kiss him on the cheek for photo ops and give him hugs, however not one of them would ever think of putting out. thus hugging the fat boy. this term could be used in the reverse of gender roles, although it is extremely unlikely.
"oh, you know Jenna, she doesn't actually like him, she's just hugging the fat boy."