It's a term of endearment used to address a father or a male figure in a fatherly role. It can also be used playfully or romantically, sometimes to refer to a boyfriend or a man in a relationship.
Important Note: While the word "papi" is often used in a positive and affectionate way, it's important to be aware of the context and the relationship between the speaker and the person being addressed. In some situations, it might be considered inappropriate or disrespectful.