I have read a couple crazy definitions of this phrase, but my father - David H. Stocky - Used it to say it when people were really greedy - like cheated him, or tried to get on over on him, and it wasn't worth pummeling them, he would say "Choke on it" to mean that he hoped their greed and unscrupulous behavior came back to them.
when someone tells you to do something and you imagine shoving a big cock in their mouth as a response (whether you be a man or a women or something else)
One of my employees was always late to work, always doing poor quality work and came and demanded a raise. Since I cant tell him directly, I used sign language to tell him to "choke on it" imagining gagging him with my dick as he struggled to connect his useless brain to his disabled mouth.