Taken literally, it’s when a person takes an action or says something -- the “signal” -- based on some principle -- the “virtue”. I think when it’s used as a pejorative (“this is just virtue signaling”), it’s being called out as disingenuous in some way. For example, if a fossil fuel company publicizes work they did to remove carbon from the atmosphere but doesn’t talk about (or even calculate) how much carbon they introduced. I could see someone calling that “just virtue signaling”.

I’m sure there are many other examples but that’s generally how I understand it. I don’t intend for my example to reflect any specific event in the past, if that matters (ie. “I made it up”). Hope that helps.