It literally describes a moment when someone's jaw drops open in amazement or disbelief.
Here are some examples of how it's used:
* "The singer's performance was jaw-dropping! I couldn't believe how talented they were."
* "The view from the top of the mountain was jaw-dropping. It was breathtaking."
* "The news of the merger was jaw-dropping. I never thought those two companies would join forces."
The key takeaway is that "jaw-dropping" implies a strong emotional reaction, often of awe or surprise.