The phrase is used in a romantic context. Example: Brad asked Nicole out on a date, but she told him, "You're not my type." Maybe Nicole doesn't like his personality or maybe she doesn't like his appearance or maybe both, but, ultimately, he isn't the kind of guy she wants to date. Alternatively, you can say, "He's not my type" or "She's not my type."

This expression can mean either you are not attracted to their physical appearance, or their personality (or both!)

‘Type’ is general and can go well beyond both physical appearance and personality. It could be highly educated, professional religious, etc

I believe it’s mostly physical

It means different things depending upon who says it. If it's a guy who is only interested in how a girl looks, then that's what it means. If it's someone looking for a soul mate, then that's what it means. If it's someone looking for someone hooked on Shakespeare, then that's what it means.