A joke at someone’s expense always gets paid for. Sometimes by them, eventually by you.

There is always a bill, and somebody covers it. In the moment it looks free, because the room laughs and the target says nothing. What actually happens is that the person pays quietly, and everyone laughing files away the fact that you are willing to do that to somebody. Later, when they are deciding who to trust with something real, the file is still there.

Watch the face of the person the joke is about instead of the room. If the laugh needed somebody to be smaller, find a different one. Being funny is not in short supply.