It means that you're hot and sexy, and also good enough to eat!
Person A: You're such a shag muffin!
Person B: Thanks!
1. Pussy, esp. one that hasn't been shaved. The general pubic area of a woman. See also; shag, muff, gash.
2. A woman who is "shaggable" or "shag worthy".
Fav: I'd go down on that shag muffin.
Ant: You would, you carpet banger!