Looking at this from your point of view, I 100% see why you did what you did.

However, looking from the other parents perspective, I would definitely not be happy at someone I didn’t put in a position of authority ie teacher, babysitter, disciplining my child. Your first two questions about laughing were fine but it descended into judgement and that’s not helpful either.

You tried to do the right thing by continuing the friendship but in situations like this, it’s best to cut ties. This kid has clearly got issues that need a lot of work, but your kids don’t need to fall victim to this type of behaviour to make him feel better. You’ll do the kid more favours by teaching him consequences for his actions mean he will lose friends. His parents clearly are happy to try and impose consequences on you while failing to effectively discipline their own child and impose consequences that curtail his bad behaviour. Ultimately they’re the real problem here