He is not laughing because he saw his funny photos
Hes in hysterics
Like the whole talking about the dead things made him realize that he could have lived a regular life
He could have been a paleontologist
But he started this game instead and now everything is ruined
He will never get his life back
He will never see his family again
He is in no way shape or form happy at this moment
i think this is an interesting theory but also digging a bit deep.
i honestly think dave just genuinely finds his young self funny, and is probably remembering some pretty good times an feeling kind of proud of his younger self too!
i guess i just like to take things more from face value, aha.