I personally think that it is subjective, though if a lot of people agree that something falls into the category, that probably tells us something important.
 
I view the “Big Lipped Alligator Moment” as a form of “narm.” It’s a scene where, regardless of whether or not it’s relevant to the plot, something’s gone a bit askew on the storytelling level. We’ve got images, dialogue, or both that are so bizarre that they jolt the viewer out of immersion, out of the story. Maybe the director didn’t understand the emotional tone the scriptwriter was going for in the scene. Maybe the scriptwriter was just in a fey mood that day. Something that was supposed to be serious is instead rendered unintentionally hilarious.
 
And the “Big Lipped Alligator Moment” is like that, only more so, usually in the form of a gratuitous musical number. Some of us don’t care for musicals and find every musical number to be narm-y, but that’s subjective. The difference seems to be that if it’s “narm,” it’s a scene that would otherwise have been normal and necessary to the plot that is just really badly executed. The “Big Lipped Alligator Moment” usually feels tacked-on and not connected to the plot, over and above its plot-stopping hilarious weirdness, and normally nothing that takes place in it has anything to do with anything in any further scene, because it generally IS tacked on. It’s filler. Some studio exec said “we just paid this pop singer lebbenty million dollars to be in our film and by God the fans are going to expect him to sing, so write in a scene where he sings.” In terms of plot and storytelling it’s something that could be edited out painlessly and the viewer would be none the wiser. This is not to say that some of these scenes aren’t hilarious on their own merits, they’re just completely out of place.
 
Movie musicals with Elvis Presley (yes, these were a thing in the 50s and 60s) were rather thinly, transparently plotted, with the absolute minimum of dialogue, plot, and scenes to get The King of Rock & Roll into a situation where he could pick up a guitar and start singing–just because that is what the paying audience was there to see. Musicals are narm-y for some of us, but Elvis singing isn’t a BLAM. You expect it. The rest of the movie is the merest shred of backdrop, the most minimal suggestion of story, for him to sing while a young Ann-Margaret wiggles her butt in a not-very-G-rated way.
 
The film “The Rocky Horror Picture Show” is composed entirely of Big Lipped Alligator Moments. As is the 1980 film “Heavy Metal.” As are most Bollywood films, at least from the perspective of Western audiences. And 1950s-60s Japanese monster movies. And American 1950s sci-fi monster movies. And anything produced or directed by Ed Wood.
 
In MLP:FiM, most of Pinkie’s songs are Big Lipped Alligator Moments. Pinkie may even be a Big Lipped Alligator herself. Or maybe Gummy is. Perhaps they take turns. I find them adorable regardless, but it’s weird.

@Sonic Ranger  
you just had the definition of a BLAM explained to you and you’re saying that it’s wrong and this is clearly right when it’s not
 
…c’mon son, git gud

No this really isn’t

@Sonic Ranger  
Then I hate to break it to you, but by commonly-accepted criteria, your opinion is wrong.

@Background Pony #ACBA  
Of course it is! That’s my opinion!

Do you actually know what a big-lipped alligator moment even is, OP? If it’s plot-relevant and makes sense in context (like here, as Fluttershy’s imagine spot to help her deal with stage fright), then it’s not a BLAM.