The narcissist often uses rude joking to insult people, when their target does not laugh they say they are too sensitive or have no sense of humor.
This is a favored tactic of the narcissist to demean once with the joke and then again when accusing them of being too sensitive or lacking a sense of humor. So the narcissist's rudeness is now the victim's fault.
If you have grown up in a family that loves to pick on one person because they are, as the narcissist sees it, the weaker person, they will continually mock the one they think they can dominate or manipulate to react in some way. The reaction of the target is food for the narcissist no matter what the reaction is, it will be twisted to look bad or stupid.
We know the narcissist means to do evil because when they see they have harmed someone their response is to harm further instead of apologizing for their own rudeness.
Something a target of the narcissist could say is,
"Cloaking your insults as a joke does not absolve you of your rudeness." This might be a good thing to say, then calmly walk away. The problem is that even saying this much is food for more fighting with the narcissist, that's why it is important to only say that not for the sake of the narcissist, but for the sake of others in the room to understand what is going on. It will have no effect on the narcissist, they will not listen and cannot learn to stop their behavior, it is a devilish soul sickness that they have no control over, it is the influence of the devil that controls them.
The narcissist is always looking for a fight, they start them and hope their target will engage so they can accuse them of something.
We are seeing this in families, politics, and every other venue in our culture where there are lurking narcissists.
Remember how the devil in the garden deceived Eve into disobeying God by making her question God's command not to eat of the fruit of the tree? The narcissist in the fashion of the devil's tactics attempts to lure their target into sin by making them question their own resolve to obey God.
The devil uses lies today through people who mean you harm but claim they are innocent. The claim that the target has done something wrong leaves the target wondering if they really did something foolish, thus causing insecurity in the devil's target.
1 Peter 5:7-9 "…7 Cast all your anxiety on Him, because He cares for you. 8 Be sober-minded and alert. Your adversary the devil prowls around like a roaring lion, seeking someone to devour. 9 Resist him, standing firm in your faith and in the knowledge that your brothers throughout the world are undergoing the same kinds of suffering.…"
The devil's purpose in using narcissists is to cause problems in believers. He wants us to respond badly to ruin our witness. When we know his tactics we can calmly speak and walk away. If the narcissist pursues, keep walking in silence until he gives up. Pray that God will deal with Him for you, this is the best response of all.
Proverbs 29:8-10 "…8 Mockers inflame a city, but the wise turn away anger. 9 If a wise man goes to court with a fool, there will be raving and laughing with no resolution. 10 Men of bloodshed hate a blameless man, but the upright care for his life.…"