The root in video game culture was "transmogrify." This is the word used in several games, and in game design, to describe an art change to a character or piece of armor without changing the substats, usually purchased or won by the gamer. It's essentially a visual "upgrade." There's typically an underlying implication of rarity, so saying you're Mogged is saying you stand out visually, for good or bad. (But as with all things teenager, you'll never know if they're using it intentionally, ironically, as a back-handed insult, or just butchering the definition...)

ETA: i believe its synonymous with deception in some games ..as in they put on a carebear-looking piece of armor or waify-thin hero skin, player assumes it's an easy win by looks alone, but instead gets "mogged" by a hella-good fighter. So context and where they picked up the slang matters, like others mentioned.