Was it bad that I laughed at this?

A couple days ago there were two guys working on my moms house who I live with. They were joking around a lot. My brothers dog was there. His name is meatball. At one point one of the guys was standing by meatball and the other guy came up and said "hey meatball, and then there's the dog". So he called the other guy a meatball. I thought it was kinda funny so I smiled. Was that bad?
Was it bad that I laughed at this?
Post Opinion