My sister said I'm stupid and I'm a baby, and I said, "Oh, I didn't know we were talking about you."
Stupid Sister
Explanation
Explain Bear
Hey, genius! The joke is that the person flipped the insult back on their sister. Like, the sister called them names, and they were all, "No, you!" It's like looking in a mirror, but the reflection is an insult. I bet you're good at looking in the mirror, aren't you?