"Hail Fluttershy, Princess of Princesses, head of the secret cabal leadership of the Mossad, the already top-secret intelligence agency of the Zionist conspiracy!" is a tongue-in-cheek crossover parody of some anti-Israeli/anti-"Zionist"/Jewish-world-domination conspiracy theories, coined by Shlomi Fish.

Here is the midrash (or study) of it explaining how it came together and the sources for it.

Fluttershy is a character in the animated television series My Little Pony: Friendship is Magic (= “MLP”), as created by Hasbro. Originally intended primarily for young children, especially young girls, the show has become popular among many adult and adolescent fans, both men and women, including mostly heterosexual males, and even many male combat soldiers from militaries around the world. It sparked an active culture of fan art (including fan fic, parodies, mashups and fan videos), and many of its fans can spend long amounts of time analysing and discussing it on online forums.

Anyway, Fluttershy is an adult pegasus pony and one of the 6 main characters of the show. She spends most of her time taking care of animals (those who do not talk), and while being kind and good-hearted, she often goes to great lengths to satisfy the whims of her friends and those she cares about. She is also insecure, recessive, does not have any magic of her own, often underestimates herself, and tends to be hurt by criticism and afraid of it. Despite all that, she is often the most effective character in the show, and has saved the day several times.

An MLP fan will find it unlikely that Fluttershy, assuming she was real, is the secret head of the Mossad, much less a secret sinister "Zionist" world control conspiracy.

Now, a “princess” in My Little Pony is an alicorn, who are ponies who have both wings and a magic horn. They are far and few between, and are a cross between a polytheistic god or goddess, a benevolent monarch, and an everyday pony who is treated like a friend and is imperfect. The creator of the show originally wanted to call them “queens”, but was convinced to use "princess" instead, which many fans would feel is better.

“Princess of princesses” is a porting of the Hebrew idiom “king of kings”, which may naively be assumed to be an emperor, but which Shlomi Fish thinks is actually a Hacker monarch (or “a messiah”). There used to be one or a few such hacker monarchs in any given time in the world, but now there are a growing number of them. Moreover, they may or may not be actual political leaders. Anyway, that makes Fluttershy even more powerful and subversive than an alicorn princess, while in the show she is only a pegasus pony with no magical powers. But that never stopped any one, did it?

Note that an MLP fan with enough respect towards Judaism will only use "Princess of Princesses of Princesses" to refer to "God", however she/he/they/it be manifested. This is because, in Jewish thought, "King of Kings of Kings" is a title reserved for them.

The Mossad in this joke was inspired by a a feature about the “Dancing Israelis” (who supposedly caused the fall of the Twin Towers) on MintPress News, which is a site that goes to great lengths to seem like a reliable source, but is in fact bogus. There was a conspiracy hypothesis that these Israelis were Mossad agents, but it is debunked here.

As far as we know, the Mossad has no secret cabal, and its current director, as of November 2019, is Yossi Cohen. The name of the director of the Mossad used to be hidden from the Israeli public, but following the growing prevalence of the Internet in Israel in the 1990s, was made public knowledge. Note that it had still been common knowledge among residents of the Occupied Territories, even before that.

Further discussion:

Badass Fluttershy by demon1887

Badass Fluttershy meme from "Terminator: Liberation"