A: Hi Jack, how you doing?
B: Pretty good, long time no see, isn't it?
A: Yeah, I didn't remember you like this! You're sort of beautiful.
B: I'm just filling out.
Now, I have a doubt about the actual meaning of "to fill out" referring to a person' body.
1) May it mean the person has simply grown up, his body has transformed and become fatter, perhaps because he has become an adult?
2) May it mean the person has worked out in a gym or something and now he's got a ripped and toned up body, without specifying whether he's grown up or not?
I am used to "filling out" referring to a young lady assuming a more womanly shape.
I suppose it may be used by bodybuilders to refer to adding muscle mass.
This dialog seems strange to me. If person "B" is named "Jack" (a man's name) it would be odd for a man to be called "beautiful," as person A does. Likewise, a man adding muscle would not be a reason for him to think he is thought of as "beautiful."
If "Jack" is instead a female, the dialog makes more sense. Person B runs into person A after a long time and comments that she looks beautiful. She responds that he is just noticing that she has blossomed into an adult woman.