What does "I'm sad but that's cool, right?" mean?

Question

I came across the sentence

"I'm sad but that's cool, right?"

Does the "that's cool" part mean that

"I'm sad but it's fine, right?"

Or

"I'm sad but being sad is cool, right?"

Thanks!

Answer 1

"I'm sad, but that's normal (= a normal reaction to the situation in question).