It's wrong to make offensive jokes.
Danny is hanging out with a group of friends which includes an Asian American.
Danny wants to tell a joke.
Danny tells a funny joke that isn't offensive towards anybody in the group.
Danny tells a racial joke which is offensive towards his Asian American friend.
Danny's Asian American friend laughs at the joke along with the rest if the group.
Danny's Asian American friend is hurt and offended that Danny would tell such a disrespectful joke.