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Now, this is weird! My guess it was out of context and you presented it as slang to him and he couldn't figure out what was so special about it...

It is perfectly common and normal (not slang). Your confusion probably comes from an attempt to translate it directly to English. Try to translate "what's up" to Russian and tell me if that's not...

Who is that Russian? :o ALthough this particular one might be a little confusing when taken completely out of context. It might be better to replace it with "Что нового? or "Что новенького?"... Что...