Avatar PVP is a game mode made by GoFluffYaself. It works with SDK2 and UDON. The idea is that you have the combat parts on the avatar instead of the world. It is a new way to do combat on VRChat.
The system functions by essentially having Specialized worlds interact with certain particle layers on specialized models with guns, swords and other weapons, that essentially tell the world to make you take damage, be afflicted with status effects, or die (this is not RP death like some other forms of PVP the world its self actually respawns you).
There are many different kinds of Avatar PVP groups eg. Warhammer 40k/Fantasy, Halo, Call of Duty, Planetside, Gears of War, Mil Sim groups, Star Wars, SCP/MTF, Doctor Who, and many other sorts of groups that are open for anyone to join.
On most weekends GoFluffYaself will host a Public Free For All (FFA) that is hosted in a world called the Meta Disk Outpost (no connection to Meta Company). These FFA's can be very chaotic with for example a few U.S. Marines running around fighting Space Marines, while a giant robot is fighting a dragon and they are all about to be destroyed by a nuke with Power Metal playing in the background (This is just an example from a personal experience your experience may vary).
There is also an Avatar PVP Testing world on VRChat called PVP Avatar Testing, where you can test if your model will function in Avatar PVP worlds.