This is a common comedic gag for characters portrayed as perverts (either canonically or in fan-based memes), or those that engage in underwear theft. Common culprits featuring this situation include Akemi Homura and Hentai Kamen and Kajou Ayame (as Blue Snow), who both feature this as part of their costumes.
This is typically shown as the panties being wrapped around the whole of the head (see post #912795, post #1021602) with the crotch of the panties covering the mouth and nose of the wearer, the waistband around the top of the head and chin, and the wearer's ears protruding through the leg holes, securing the sides of the waist band.
Other methods also exist, where the top of the waistband crosses below the wearer's eyes (see post #4082406, post #3944133). This form better evokes the form of a mouth mask and seems to have become more common in response to the coronavirus pandemic of 2020.
Other variations can exist (e.g. post #3308317, post #1717051, post #65772). This tag is applicable so long as the face is largely involved, and the panties aren't simply worn on the top of the head like a hat, with the waistband around the forehead. Panties on head covers both cases, and is implicated by this tag.
For the converse of this tag, where a mouth mask is worn over the crotch as if they were panties, use the tag mask panties.
