The term vertical smile references the way that the labia, or vaginal lips, looks similar to the lips on a face that form a smile. However, unlike the lips on the face, which run horizontally, the lips of the vagina have a vertical orientation. That's why the female genitals are called a vertical smile.
More About Vertical Smile
Strictly speaking, any type of female genitalia can be called a vertical smile. However, some people only use the term to describe female genitals with large or prominent vaginal lips.
Vertical smile is seen as a moderately vulgar slang term for the female genitalia. However, it may be seen as more vulgar depending on how it’s used. A factual article with instructions for “keeping your vertical smile fresh and clean” is likely to be seen as witty and playful. Many people also believe references to a woman’s vertical smile opening up or getting wider after sex are distasteful.