I would say God bless your heart, when somebody did something really nice, something gentle, kind or sacrificial.
To say God bless your heart is not merely saying thank you, but also acknowledges that person's kind heart, and wishes that God would reward them for their kindness.
God bless you all, especially those with kind hearts.
2. This is a term used by the people of the southern United States particularly near the Gulf of Mexico to express to someone that they are an idiot without saying such harsh words.
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