In LGBT+ context, to slay means to do/give something really well, to the point it impresses lots of people around you; which is comparable to (but not fully definitive of) being a soldier on a battlefield slaying everyone around him in high precision. The word 'slay' was popularised especially by the drag community, with many using it at ballroom events to complement drag queens who expressed themselves with sharp, flattering
feminine energy.
For a very long time, 'slay' was a word especially centred to the LGBT+ community, especially for drag queens (the word found more prominence on RuPaul's Drag Race), and femme gay men; therefore, it was a word only people around a certain community knew of.
And then, along came Beyoncé (with especially the song Formation), causing the word to enter the
vocabulary of many straight girls for the same usage and purposes (and entered even worse
popularity by TikTok).
Before 2016:
Drag Race host: Girl, I gotta say, you
absolutely slayed on that lip sync battle!
After 2016:
Straight
teenage girl: Hey, I have pics of Sabrina at the red carpet. Like,
oh my god, have you seen her dress? It actually slays.