Person #1 is "its complicated" with Person #2.
II. Can be used as either an indicator that the two people involved are loosely in a relationship, or are taking a 'break,' or it can be a cover for another relationship --> If a girl is 'married' (as a joke) on facebook to her best friend who is a girl and she gets in a relationship but doesnt' want the world to know, she can say 'It's Complicated' with her bestfriend.
Oh my God, I cried so much during It's Complicated. I need to bring less Adderall next time.
"Yeah, maybe he's just cheating, or 'just' maybe he knows what's up about human behavior. Read up on it. Besides, not like you know what you're doing with your girlfriend either."
"Seriously folks, it's best to leave that part on your profile blank. It's none of anyone's business."