It applies only to number 2

Pátri is correct; it means "I expected it would be funny but it was way funnier than that" (fun and funny have different meanings) .

Hi Dolco, basically No. 2 is a better match to this title. "things" is plural so the verb should be plural also: "are" not "is". Or you could put both the noun and the verb in the singular: "a thing like this is no laughing matter". Helen

Oh now I get it. So #1 is like "I laughed 2 when I should have laughed 1" and #2 is like "I laughed 2 when I should have laughed 0".

Fun and funny are different things. Having fun doesn't always follow with laughter so sentence number 1 doesn't create a cohesive thought in my mind. If you said however "I expected it to be funny, but it was way funnier than I anticipated" then you could definitely use that in certain contexts like the one in your title- for example, my friend wants to send me a funny meme- I expect it to be funny- but it was way funnier than I expected so I laughed harder than I should have at it. You laughed harder than you should have because you expected something less and were pleasantly surprised- thus bursting into laughter. Otherwise in number 2 It just entails that you were placed in a situation that it was inappropriate to laugh, and you harder than you should have becomes a more negative descriptor of your action of "laughing".