TL;DR: It’s all a meme-poisoned bluesky circle-jerk involving transphobes and people who desperately want transphobes to think they’re cool.
The link from self to mcc’s bluesky thread sums up this stuff with references, but to attempt to summarise the summary, there’s a tweet from the depths of time (2017) that says
Twitter the only place where well articulated sentences still get misinterpreted.
You can say "I like pancakes" and somebody will say "So you hate waffles?"
Bluesky ceo jay graber uses “waffles” as shorthand referencing this post, and whipped it out when asked about bluesky’s ongoing unwillingness to do anything about noted transphobe jesse singal, who has since posted about how much he loves waffles.