It is used to express surprise or enthusiasm in the same sort of way as more modern terms such as "Alle Achtung!" and "Respekt!" but it is also used in the same way as swear words to express frustration or outrage. Other similar words are "Verdammt! or "Verflixt!".

Examples of when "sapperlot!" is used in English:

[1] Sapperlot, - that’s fantastic!
[2] Sapperlot, wash your ears out! I’ve already told to stop doing that!

Examples of when "sapperlot!" is used in German: 

[1] Sapperlot, das ist grossartig!
[2] Sapperlot, hast du was an den Ohren? Du sollst sofort damit aufhören, habe ich gesagt!!


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Bavarian language - Sapperlot image.enlarge
Bavarian language - Sapperlot