This phrase is used when someone makes a disparaging and/or racist comment about the majority racial group, and tries to cover up by saying that it was intended to fight racism. Like many other terms intended to denounce "woke" content, this phrase is meant to be perceived with sarcasm, and its users don't actually believe the target has done anything to fight racism. BTFO, meaning "Blown The Fuck Out", also fits next to other terms which describe bigotry, such as sexism or misogyny.

(revised definition)
In light of the death of George Floyd in Minnesota, an employee at BuzzFeed made an article on how in order to stop racism in America, white people need to "integrate". Racism BTFO.
by officialpyrocynical May 30, 2020
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