'Nowt as queer as folk'

I would guess their laughter in the scene is because Dave and Gaz realize it was an unwittingly witty statement. They are discussing two of their mates that they didn't realize were gay (pejoratively referred to as "queer"). Dave could have just as easily said something like, "Oh well, people never fail to surprise me." Instead he phrases it in a way that cracks them up when they realize what he just said - a double entendre.

Carlyle and Addy seem to be "really laughing" because they are good actors.

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I've found the line "there's nowt so queer as folk" in English novels written in the fifties--it's a cliché meaning of all the weird things in the world, humans are the weirdest.