Lipstick is currently a useless item, and often considered as junk.
Lipstick has no use, being added purely for the purpose of clutter, creating more realism for the player when looting.
Lipstick can be found in bathrooms, desks, purses and vehicles.
From newitems.txt (Project Zomboid directory/media/scripts/)
Weight = 0.2,
Type = Normal,
DisplayName = Lipstick,
Icon = Lipstick,
MetalValue = 1,