A saying that has existed for a long time, but wasn't extremely popular until it became famous through the Pirates of the Caribbean ride at Disneyland, in which a pirate-ish skull and crossed bones on the wall utters this very phrase, among other things. Basically, what it means is that to keep something quiet, kill anyone who knows about it and, since that person is dead, it would be pretty much impossible for them to tell your secret. A similar saying is "Three can keep a secret if two are dead," invented by Benjamin Franklin.
So, you don't want anyone to find out that you're secretly a Hilary Duff fan? Just kill everyone who already knows--after all, dead men tell no tales.
No matter what decision you make, or how nice or mean you are to a character in a telltale game, they end up being a jerk to you anyway. Choosing the right words or even agree with them constantly has no bearing on how they are going to treat you. Rendering your decisions pontless
Ace: dude I decide to lily in season one, and yet she still calling me out for shit I didnt even do!