First, a more general reason: Psychologically, it’s common for people to laugh in sad or uncomfortable situations. In a 2021 article, Dr. Abigael S, a clinical psychologist, explained. ExpressThis article explains why people love funerals. “A funeral is a situation that many people find very difficult emotionally with everything that it represents. An expression of laughter can be what we call a manic defense, almost like a coping strategy but in a defensive way. Anything to divert the reality of what is happening and the reality of loss and human vulnerability and the end of life.”
However, when it actually comes to Daemon and his motives, it’s likely that something sinister is afoot. He laughs when the priest discusses the ties between families, but Daemon of course knows that there’s bad blood between the families, so he could be laughing at the lack of truth. Perhaps he is realizing that Rhaenyra can be his partner now.