It is a somewhat old fashioned way of saying "just kidding." It sounds more Shakespearean than "jk d00000d."
Person A: Bitch, I'll kick your ass!
Person B: *Gasp* You have such a sailor mouth!
Person A: What the motherf**k??
Person B: Har har, I kid, you old sea dog!
Person A: Har har har har!
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