In the old-school days of poker, you could be shot for slow-rolling (showing your hand late). Nowadays, in a professional setting, it can be a tool to put your opponent(s) on tilt.
If I know that my opponent is easily peeved, I will hop back and forth over his dead character until the timer runs out simply to have him angry during the next match. His anger will be his undoing.
Otherwise, I will simply uppercut them to serve as my fatality. Unless, of course, I am Reptile, in which case I will back up, do a slow EX Ball, go invisible, then double dash to elbow them into the ball.
Another fine example of teabagging would be to---as Smoke---gain a convincing lead (say, your 95% health to their 10% health), and Smoke-Away in the corner all day, countering any fireballs and running teleport punches on any jump/punishable whiff.