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I know what THAT means 

A verbal prank commonly used by in a conversation, with the intent of annoying the listener. In this prank, there are two parties having a conversation: person A (the pranked) and person B (the pranker). Person A makes a simple, innocent remark with no double meanings. Person B initiates the prank and replies, "I know what THAT means" (note the emphasis on the word "that").

The prank is that person A begins to feel insecure or uncomfortable about what they have said, because the phrase, "I know what THAT means" gives the impression that person B misunderstood what was said (i.e. thinks it has a sexual meaning, or thinks they're lying about something). Person A is completely unaware that person B is just trying to annoy them.

After this, person B could proceed to only say, "I know what THAT means."
Dwight (person A): Hey man, I just remembered, that new Eminem album is out today! Wanna go get it?
Jim (person B): I know what THAT means...
Dwight: Um, what do you...think it means?
Jim: I know what THAT means...
Dwight: **quizzical look on face** um, all I asked was, wanna get the new Eminem album...?
Jim: I know what THAT means...
Dwight: **getting kind of annoyed** do you wanna get the new Eminem album or not?
Jim: I know what THAT means...
Dwight: **more annoyed** what does it mean?! Eminem album or not?
Jim: I know what THAT me--
Dwight: **angry** WHAT? WHAT?!
Jim: I know wh--
Dwight: WHAT DOES IT MEAN??!! WHAT??!!
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lol I know what that means 

basically when you start to flashback an example of a cute japanese word
P.1: Hey do you remember something you search of an example of how a cute japanese word is used?
P.2: 😳 *vietnam flashbacks*
*going back into how the P.2 searched "Nya" and how it see an example of that word*
"Chelsea: Nya Nya~
Sarah: Meow Meow, lol I know what that means!!! ^__^"
P.2: oh f*ck 😳

I don't know what that means 

A common response that happens when an asker made a point
but the receiving end felt offended and looked down on the question.
Then quipped by the receiving end!
A: Hey any tips on how to make money?

B: I don't know what that means.

I don't even know what that means 

This phrase is tagged to the end of one's speech in order to reveal an innuendo or undertone. It is expressed with a wide-eyed expression and a tone of confusion. It is often synonymous with "That's what she said".

Unlike "That's what she said", it is proper for one to add this phrase to the end of his/her own speech, as well as for others to do the honor for him/her.
Scott: "This female's pelvis has been articulated... I don't even know what that means"