Cutting It Out

Listen here, genius, you are posting online. That means you must be very special because only special people post online. The 'friend' told you to stop with the 'sh jokes' which we all know stands for self harm. You responded that it wasn't that serious and that you would 'cut it out'. You're not actually saying you would cut anything. The humor comes from you using 'cut it out' which could be seen as literal since you are talking about self harm. It's called a double entendre.