etymology - What is the origin/history of "you do you" (or "do you")? - English Language & Usage Stack Exchange
meaning in context - How should we understand this conversation about the use of the phrase "you do you"? - English Language Learners Stack Exchange
What does You do you. mean?
You do you? How does it even mean?
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The full phrase this originated from is "do you and I'll do me". Another variation is "do you - cuz I'mma do me". The oldest reference to the phrase that I could find is from the song Do You by Funkmaster Flex (featuring DMX), from the album Volume IV, released on December 5, 2000.
This could be a variation of the phrase "do your thing", which has been in use for at least a century.
1818 Frankenstein ( Mary Shelly) Chapter 19 excerpt.
Do you,’ said I, ‘enjoy yourself, and let this be our rendezvous. I may be absent a month or two; but do not interfere with my motions, I entreat you; leave me to peace and solitude.
That saying is at least 200 years old! Just stumbled on this post after listening to the read of this.
Since you've tried to look up "you do you" I assume you have a general idea of its meaning. You indicate that the explanation on that Urban Dictionary page confuses you. The popular meaning of "you do you" or "do you" is very simple: When someone says that to you, they mean to tell you that they don't necessarily agree with you but they can't change your mind and won't even want to attempt to change your mind. It's a slightly ruder, newer, and more millennial-sounding version of "suit yourself" and "to each their own".
But there is a lesser common meaning of "cool", "you did good", "good job", or "be yourself". The Urban Dictionary example goes like this: Person A tells their friend they bought a scooter for $20. Their friend Person B thinks it is a good deal, so they tell Person A: "You did a good job, just like you always do." I don't hear this sense of "you do you" used very often in real life. When I hear "you do you", it is always used in a sarcastic way, in the first sense I mention above.
"You do you" can be used when giving up an argument as Eddie Kal answered but it has a more positive meaning as well.
The first definition that you linked to says:
"the act of doing what one believes is the right decision, being oneself"
It can be used to say, "go for it!" or "put yourself first" or "take care of yourself" or even "treat yourself".
Person: "Dude, I just dropped, like, 20 bucks on a scooter.
Person: "Cool, you do you."
So when I read this example, I hear a more positive response. Here is the same conversation how I would interpret it:
Person: "Dude, I just bought a scooter for $20."
Person: "That's great. Do what makes you happy."