Theoretically, when one says "that's what she said", as long as a she said it, then it's fine. She's definition is to refer to a female. In other words, a girl. So as long as a girl says the statement that one said before one said "that's what she said", then it's fine. However the stupidity of this situation is very easy to discover.
As you may know she, a girl, has the basic ability to talk. Unless they're speechless. And not just the previous statement. The ability to talk means that she could say anything. Meaning that if she said something to support the statement she could have said something against the statement. This free will of speech is found in almost all countries and since the term she is variable to summarize of all female kind, then there is nothing she can't say.
It's also worth noting that if you know someone that's name is called she or his/her name is pronounced like she, you must treat them with upmost respect. Why? Because those are the only rules of That's What She Said and because of memes and general kindness.
So next time you're in an argument or conversation of That's What She Said, remember that you can do nothing against the power of the reason. But know that all your statements are also supported by the strength of the she.
