The context of the following conversation is Tracy was talking Kendall up and giving her hope. Tracy ended up giving Kendall a big head.:
Tracy says I told Kendall that she is so beautiful with that new hair cut. She really  believed me and now is going around like she is all that..
The friend responds That wasn't nice. If you did not mean it..
Tracy responds Well, I was just having fun. Seriously, her hair cut wasn't bad, but it's her problem if every compliment goes to her head..
The friend responds Well, at least she has high self esteem..