Any act of putting an item into your inventory in a video game, especially if you're not going to use it.
First made popular by a popular YouTuber DeliciousCinnamon, this term comes from a blind idiot translation of Pokemon Vietnamese Crystal. Due to varying graphical representations of putting inventory items away, a real life act of bag fuck remains a mystery, much like recipes for volcano bakemeat and kuang steak.
As the term bag fuck is also being popularized by another YouTuber, Slowflake, it may become either a forced meme or a valid Internet forums term.

Invented in Borat's movie. It is said, when something great happens.

When a girl has a really good body but a horrible face so you would/put a paper bag over her face/head while having sex with her.

A girl that is so damn ugly you want a bag to barf in while you fuck.

having sexual intercorse with an ugly {bitch} by putting a bag over her head.