Hi, We're not laughing at you, 'At' here does not refer to location. It means that our laughter is not directed towards you. We do not think you are comical/funny.
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CalifJimThe more usual formulation, by the way, isif the interlocutor is not laughing, will "with" still be correct?
We're not laughing at you; we're laughing with you.
CJ