They had spent a long time out in the desert slowly dying to a Stand that basically was a second sun or made the sun hotter (it's not really clear) and they were trying to find the stand user, who surely couldn't be far away because it's an absurdly powerful Stand (range and power usually inversely correlate). On the edge of losing consciousness, they notice that the user is literally just hiding behind a mirror and they glossed over the reflection as being part of the landscape, and between the sheer silliness of it and the delirium of the heat they laugh maniacly before Star Platinum just throws a rock at him through the mirror and takes him out instantly.

It was one of the extremely throwaway fights that part 3 is full of, but at least it was still amusing.

It's been a while since I watched JoJo Stardust Crusaders so I might not be fully correct on this. The people laughing are the main cast in the show and they are fighting an enemy that has an ability to make them laugh manically.