To be brief: Poe’s Law is when something is so over-the-top and ridiculous that you, the reader, are not sure if the author is being serious or satirical. In fact, based on what information you have before you and without authorial intent explicitly stated, it could really go either way.
Now, obviously, the people who are sincere in their crazy shenanigans are not the ones who create this conundrum. No, it is the satirists who either purposefully make their imitation so close to real life or do so by accident. If done on purpose, the satirist knows exactly what they’re getting into (mostly). Many times these people function as internet trolls. Typically, they will hide something in their words or actions that gives them away, but only if you’re paying close attention.
Think about Stephen Colbert from The Colbert Report. There were people out in the general population who thought him sincere in his conservatism. No, really. There were. Those people fell victim to Poe’s Law.
Needless to say, the person posting it and the others who commented didn’t get that the game’s poster’s intent was to make fun of them.
That being said, sometimes Poe’s Law causes ill-will to form against the satirist. If people don’t get the joke, and the subject in question is being handled with less than the utmost care, and it happens to be a hot-button topic… Things can turn ugly pretty quickly. That is why you should always verify, verify, verify before jumping head-first into a mob frenzy on social media.
Find a decent list of parodies that have fallen victim to Poe’s Law can be found here. However, be prepared to lose a few hours of your life to that website.