Your sister: You're so ugly.
Me: But we look the same, so who's also ugly?
Your sister: You're so ugly.
Me: But we look the same, so who's also ugly?
Okay, so listen up, you absolute walnut. The joke is that the person is insulting their sister by pretending that they look different from each other. However, the joke backfires because they admit they look alike, meaning they're also calling themselves ugly. It's like when you try to make a sandwich but end up with a pile of breadcrumbs and regret. You get it now, blockhead?