Well now, Papa Kitty and Jack Preston King, I agree that when I’ve heard conservatives and trolly sorts use this phrase, the word snowflake usually isn’t far behind, and they’re definitely using it as an epithet. I think this is what you’re both talking about here.
But I think they co-opted “virtue-signaling” from marginalized groups who use the phrase in “not all” situations. Like when I might tell about my experience with racism and a white person responds with something like, “I’ve never treated anyone differently because of the color of their skin. I give to the NAACP and help crippled black children every day after work. You shouldn’t write your story as if all white people are bad.” Because that sort of comment shows a disdain for listening to a person of color’s experience and emotional response as it truly is, the commenter is considered to be virtue signaling (like jumping up and waving their arms to call attention to their “Not All-ness.”)
They virtue-signal as a way to shut down the speaker while still appearing to be an ally. Problem is, it’s sometimes hard to detect the implicitly-biased (accidental) signaler from the self-righteous one who’s miffed and knows what they’re doing. Both are micro aggressions that get old pretty quick. Papa Kitty and Poe, I bet you’ve run into them too.