As Tessa said, it's more so a combination of tough and cool. Some people would use the term to describe someone who just won a fight: "Wow, you're such a badass!" It can also be used ironically. For example, if somebody were trying to brag about doing well on an easy test, someone might say: "Wow, what a badass" with a sarcastic tone, as to imply humor and that they're overstating their actions.