What it do is a laid-back, colloquial greeting, meaning the same as “Hello, how are you?” or “How is your day?”
What it do, baby? is a flirtatious version, normally said by a man to a woman that he is attracted to. You would normally not use this version to your homie.
It is normally a rhetorical question, said without expecting any long answer, and you could even just respond with a general greeting.
It was first heard by rapper Keak the Sneak “Z Kush” in Oakland when asking a person what his car could do. It was then adopted in the Bay area for asking a friend how he is doing.
It spread viral when famous basketball player Kawhi Leonard said it in a video found on YouTube in 2019.
The slang is more popular in the American black community and between Hispanics, than in the American white population.
It is associated with ghetto slang, and is mostly only used between friends.