It means "I don´t understand" and is a very common idiom in UK colloquial English

In the United States it is an idiom that has become popular... sometime within my lifetime. It suggests _both_ "I don't understand that" and "I can't accept that." Exactly what it means depends on context. The indirect language is a way of being somewhat polite or tentative. It is saying "I am stupid" rather than "You are unclear" or "You are wrong." I think the closest "translation" into plain language is "I can't follow that line of reasoning." In your example, she doesn't accept that line of reasoning because she doesn't like where it leads." Some possible examples of use. "So, when interest rates rise, bond values fall." "That's been explained to me dozens of times but I still can't wrap my head around it." That would simply mean "it's really hard for me to understand." "So, paradoxically, raising the minimum wage would actually make things worse for low-wage workers, because employers wouldn't be able to afford to hire them." "Sorry, I've heard that before but I can't wrap my head around that." That probably means "I think I do understand the arguments for not raising the minimum wage, but I don't think they are valid."