Hogging the machine is the simple act of not getting up when you lose a game, even though other people are waiting to play.
At certain games, there isn’t much of a problem: someone who is at a prize game, for example, is probably going to keep going at it until they win. In fighting games, however, the model works on challenging. Someone who loses usually has to go to the back of the line (unless the people waiting don’t particularly mind, of course). This way, more people get a shot at playing.
One case in which this is generally acceptable, however, is when a (good) player from another locale has been invited to challenge local players. Since in this case, the idea is to face that player instead of just anyone playing the game, it is okay for them to keep playing if they lose.