You don’t have to win the argument with a bully. You just have to stop agreeing with them.

Trying to out-argue somebody who is enjoying the argument hands them exactly what they came for, which is your reaction. Winning was never on the table. What is on the table is withdrawing your agreement: the nod, the laugh, the going along that makes a cruel joke land. Without those, the performance has nothing to stand on.

Decide in advance what your face does. Do not laugh, do not supply the next line, and let the pause sit there unhelped. Then change the subject or walk somewhere else.