"The nosebleeds" is a colloquial term that refers to the seats in the way back of a stadium. So someone must have been watching a concert or something from the way back and applauding for the performance.

It sounds nonsensical. No one ever says that! Don't spend any more time on it!

Check out "nosebleed section" on Wikipedia. Apparently it refers to the cheapest seats in a theater. You learn something new everyday.

..