In the Haley only road, It's pretty gross, and only mildly funny if you have a pretty sick sense of humor - but after all, we're here playing a porn game where we primarily banging our twin sister, so who am I to calling "sick" - as it comes from nowhere. You're just sitting on a bench, casually telling your sister how their father would be fisting their mother, just to gross her.
In the Sandra road, this is way funnier, as it is an answer to Haley's multiple previous "jokes" on how she's gonna fist Sandra, just to gross his brother/make him jealous. And even there, it's a progression, not really dropping from nowhere. It starts with Haley continuous jokes on how she'll steal Sandra, and the fact she talks to her almost more, and knows more about her come and go than the MC. To which the MC reacts "wow you talk to her in my back, what else are you doing - fisting, but th'at's stage 2". The joke then comes regularly after that ('I'm gonna stretch out your girlfriend!" /" and then the footing starts. I've moved on from fisting, I have higher ambitions now."); and so the MC's sick joke is just a reply to that. Which works, as the end of the conversation is Haley proposing the deal to never joking about fisting Sandra evermore, in exchange the MC never doing the same about their father/mother.
