Sarcastically used to point out an unfunny joke. It originates from the act of slapping one's knee during vigorous laughter. Later took on a sarcastic meaning.
Comedian: I just flew in from Los Angeles, and boy are my arms tired!
Audience member in sarcastic tone: wow that's a real knee-slapper
Guy 1: So a guy walks into a bar...OUCH!
Guy 2: ROFL THAT'S A KNEE SLAPPER! *slaps knee*
Random Guy: Oh yeah? How bout a face slapper! *slaps Guy 1 and 2's face*