I've been told this phrase dozens of times. Sometimes it sounds like a compliment, sometimes like an excuse. I've figured out when it's true and when it's just a way to make a graceful exit.
When a man writes this after 3-5 messages, it's almost always manipulation. He's already putting himself in a lesser position so I can start persuading him. It's a classic ploy to shift the responsibility for continuing onto me.
But when they say this after a few dates, when we've already laughed together, I've shared something personal, and he, too, then it might be sincerity. He sees that I'm independent, vibrant, with plans and self-respect, and suddenly feels unworthy. This isn't always a bad thing; sometimes such men are afraid of ruining something good.
I usually respond with, "Thank you for thinking I'm good. But let's decide together whether we're right for each other or not, instead of rejecting me outright." And I'm watching for reactions.

Men, be honest: have you ever written "You're too good for me"? And what did you really feel?
Vera❤️