It's slang for "Ignore them" or "Forget what they said" or "Don't take any notice" or several other things depending on context.
- I want to go to Pizza Hut for lunch.
- So do I, but all our friends are going to McDonalds for lunch.
- Screw those guys! If we want to go to Pizza Hut then we will. They can go wherever they like.
Perhaps "more polite" was an overstatement. "A bit less rude" perhaps? If someone said "Stuff you" to me I wouldn't like it much but it wouldn't contain actual offensive words (swearing) which "Screw you" does. I don't think there is much chance that someone saying "Screw you (guys)" would be attempting to be polite in the first place.
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