A phrase used by a simple-minded person to demean the creativity, efforts, interests and achievements of another because they do not specifically relate to said simple-minded person's interests. While it is sometimes used when refering to a genuine waste of time, generally its usage pertains to interests that are very much a legitimate way to spend time. There is nothing wrong with having hobbies, even if they aren't mainstream.
Note that this definition is not in reference or response to the previous definition.
Person1: Hey, can you read my short story and tell me what you think of it?
Person2: You spend hours doing something you enjoy doing that requires talent and creativity for the purpose of entertaining yourself and others as well as developing skills that could prove useful outside of said activity? You have too much free time on your hands! I'm gonna go smoke some weed and watch TV.
The reason for all art and culture's existence is humanity having too much free time on its hands.