I was so surprised that my sim starting "dying from laughter!" I thought it was just a way of saying she was laughing for a while and couldn't do anything else until she was done...until the grim reaper actually showed up! I frantically tried to "cancel" the action, which we all know we can't do when death is involved. All of my other sims were at work or school. I brought her husband home from work, and he "pleaded for" my sim with the grim reaper, and the grim reaper let her live!
Then I had him make friends with the grim reaper so I could get that "badge."
Everyone eventually came home from work and school and all sat around chatting with the new family friend, Mr. Reaper.
FYI: If you want your sim to die from laughter, here's how it happened, I think:
That sim had completed the Joke Star Aspiration. As a result, she has some really powerful joke telling abilities, such as "Horrifying Joke," "Best Joke in the World," and "Weaponized Joke." She was performing these actions with a sim and also using the tiki bar to make "Happy Potions," unlocked by completing the Master Mixologist Aspiration. I wasn't watching her too closely. I now know that, for some reason, when a "Master Mixologist" makes Emotional Potions (Happy, Inspiring, Flirty, etc.), they drink them immediately. I had been having her make a lot of them, intending to put them in the fridge to use as needed. I think she drank about 6 happy potions and was telling a bunch of jokes to a friend when she started dying, and the grim reaper showed up. There was also a lot of "playful" decor around.