IYKYK works as a wink. It frames content as exclusive without explaining the joke, which both flatters the people who get it and creates an information gap for the people who do not. That gap drives comments ("ok but what happened") and shares within a community.
It is common on content tied to a specific subculture, region, era, or fandom — a sound only gamers recognize, a snack only one country sells, a meme format that has run its course everywhere except one corner of the internet. Used too broadly it loses meaning, so it lands best when the reference really is niche.
