It suggests that someone is making a big deal out of something that isn't actually a serious problem.
Here are some examples of how it might be used:
* "The whole argument over the missing stapler was a tempest in a teapot."
* "Don't let their complaints about the menu be a tempest in a teapot. It's not a big deal."
* "The media is making a tempest in a teapot out of this celebrity's latest fashion choice."
The idiom is often used to emphasize the absurdity of a situation where people are reacting disproportionately to a minor issue.