When someone tells a really long story that really has no point to it at all and at the end you make a little chuckle, giggle, or laugh out of courtesy.
Friends mom: *insert long pointless story here*
Friend: That was such a couresy laugh
When someone tells an absolutely terrible joke, and no one laughs, you give them a courtesy laugh. This should not be mocking and done very tastefully.
Jim- "...And so the atom says, 'I lost an electron!' And the bartender says, 'Are you sure?' and the atom goes,'I'm Postive!'"
Jake (thinking)- Holy fuck that was a horrible joke, he needs a courtesy laugh
Jake- HA HA HA